South Korean President Lee Jae Myung has committed to advancing significant housing reforms, despite the potential for political repercussions. He emphasized that failing to address the escalating property bubble could result in extended economic stagnation. During a policy forum, Lee highlighted the necessity of exploring increased property holding taxes, adjusted capital gains taxes, and stricter mortgage lending regulations as measures to deter speculation and stabilize the housing market.
Lee cautioned that South Korea faces the risk of a drawn-out economic slowdown akin to Japan’s experience following the burst of its property bubble. To mitigate this risk, he outlined a targeted strategy aimed at shielding single-home owners, lower-income households, and residents outside the capital region. This approach would involve imposing heavier tax burdens on individuals owning multiple homes and those with high-value speculative properties.
The president also advocated for more stringent controls on rental-deposit loans, while offering exemptions for young people, newlyweds, and other vulnerable groups. This move is part of a broader strategy to address housing market challenges while ensuring support for those in need.
Stressing the importance of these difficult reforms for the country’s long-term economic stability, Lee asserted that the government must be prepared to bear political costs to avert a more significant economic crisis. The administration is anticipated to reveal a comprehensive real estate policy package later this month or in early August, reflecting its commitment to addressing these pressing issues.