Oh Se-hoon calls property and capital gains tax hikes 'tools that should never be used'

Seoul Mayor Oh Se-hoon said Monday that the government's move to tighten property holding taxes and capital gains taxes — unveiled immediately after the local elections — was not a "last resort" but a "tool that should never be used." He also asked President Lee to hear Seoul's views before proceeding with a full-scale tax overhaul.

In a post on his social media account Monday, Oh said the president had described real estate tax hikes as a "last resort" yet had rushed to deploy them within just one year in office. "They are determined to go down the same failed road of trying to control home prices through taxes alone, while keeping supply bottled up," he wrote.

Oh said the presidential chief policy secretary's argument — that tax tightening was needed to prevent liquidity from the semiconductor boom from flowing into real estate — was "profoundly mistaken in its diagnosis." "Capital moves strictly in line with market conditions," he said. "If money is flooding into real estate, it is not because taxes are low — it is because of anxiety over supply shortages, concentrated residential demand, and expectations of future value."

"What the government needs to do right now is not drop a tax bomb, but respond with aggressive supply that meets demand and the normalization of reconstruction and redevelopment," Oh said.

He also took aim at the commissioner of the National Tax Service, who argued that adjusting the capital gains tax exemption and long-term holding deductions for registered rental business operators would have the effect of supplying about 68,000 homes in Seoul. "That, too, is a misjudgment born of not understanding market conditions," Oh said. If rental properties are converted to owner-occupied units, he argued, only jeonse listings will disappear from the market — and jeonse supply in Seoul has already fallen more than 30 percent compared to last year.

"If a heavier tax burden is added on top of that, landlords will lock up their properties and pass the costs on to tenants, accelerating a monthly rent crisis that will eat away at the disposable income of young people and ordinary citizens," he said.

Oh said real estate policy is judged by results, not intentions, and invoked what he called the "catastrophic failure" of the Moon Jae-in administration, which he said failed to rein in home prices while driving tenants into a "hellish" jeonse shortage. "We must break free from the dogma of suppressing the market through taxes and shift to the realistic path of expanding supply," he said.

Oh closed by urging the president to hear Seoul's position before any formal tax overhaul discussions begin. "Based on the precise on-the-ground data Seoul has accumulated and the reality of declining jeonse supply, we will explain in detail the ripple effects this tax overhaul will bring," he wrote.