A public opinion survey conducted ahead of the government's "Real Estate Grand Debate" produced calls to restructure the comprehensive real estate tax so that it is levied on the combined value of properties held rather than the number of units owned. Participants also demanded a review of regulations on reconstruction and redevelopment projects and an expansion of non-apartment housing supply. Views were sharply divided, however, on whether to maintain regulated zones, ease loan restrictions for end-users and reform holding taxes.
Lee Hyeong-il, first vice minister of the Ministry of Economy and Finance, presented the pre-forum survey findings at the Real Estate Grand Debate held Thursday. The results combined online submissions received through the public policy proposal website "budongsan-toronhoe.kr" and input gathered at a series of listening forums held from July 14 to 16.
According to materials released Thursday, a total of 5,004 online public proposals had been submitted as of 8 p.m. Wednesday. Housing finance drew the most submissions at 2,197, followed by housing supply and regulation at 1,530 and real estate taxation at 1,277.
Lee introduced opinions organized around 16 topics — six on housing supply, four on housing finance and six on real estate taxation.
In the housing supply category, calls to revisit regulations to boost supply stood out. Proposals included converting idle urban land — such as semi-industrial zones — into residential use and rezoning non-residential sites for housing on the condition of public contributions.
On private redevelopment and reconstruction, both the listening forums and online submissions called for raising floor-area ratios and rationalizing mandatory public contributions to improve project viability. Online respondents also called for lowering the consent rate required to form reconstruction associations and easing reconstruction levies.
Participants called for easing business loans and excluding certain housing units from property-count calculations to increase non-apartment supply. Online submissions in particular included a large number of calls to ease regulations on small officetels and urban-type residential housing. On the question of who should supply rental housing, opinions were split between expanding high-quality public rental housing and boosting private rental supply through deregulation and government support.
Views on the designation and operation of regulated zones were also divided — some argued the current system should be maintained to stabilize the market, while others said it should be redesigned given its dampening effect on supply. Online respondents additionally called for differentiated application by area or an outright review of the system, citing concerns about listings being locked up.
On public housing, two competing views emerged: one calling for a higher share of public pre-sale units to restore the housing ladder, and another urging an expanded share of public rental units to strengthen residential welfare.
In the housing finance category, aggregate loan management and financial support for genuine end-users emerged as the main points of contention. Opinions were split between those who said aggregate loan caps should be used only as a temporary tool and those who argued they must be maintained to stabilize the housing market and manage household debt. Online respondents leaned more toward easing the caps.
On loan restrictions for young people and end-users, views diverged between calls to ease rules for young people who lack income and assets and arguments that restrictions should be held in place given concerns about rising home prices. Online submissions were predominantly in favor of easing restrictions to help young people and newlyweds buy homes.
On relocation loans for redevelopment projects, opinions were split between those who said sufficient lending should be provided to invigorate urban renewal and those who said the pace of deregulation should be managed given instability in the jeonse and monthly rent market. Online respondents largely favored easing relocation loan restrictions. On jeonse loans, views were divided between expanding supply to stabilize housing for low-income non-homeowners and tightening management to prevent real estate price increases, with online opinion tilting somewhat toward expansion.
In the real estate taxation category, opinions converged around six topics, including holding taxes on ultra-high-priced single-home owners, the tax base for the comprehensive real estate tax and taxation of non-resident single-home owners.
On holding taxes for owners of ultra-high-priced single homes, views were split between limiting what some called excessive benefits and urging caution about taxing unrealized gains. At the listening forums, various thresholds were proposed, ranging from 3 billion won ($2.03 million) to 5 billion won.
On the tax base for the comprehensive real estate tax, participants called for shifting from a unit-count basis to one based on the combined assessed value of all properties held, and online respondents were broadly supportive of the change. On non-resident single-home owners, opinions ranged from strengthening residency requirements and raising the tax burden for non-residents to calls for consideration of unavoidable circumstances that prevent residency.
On the relationship between holding taxes and transaction taxes, views were split between those who favored a holding-tax-centered approach with lower capital gains taxes to improve market liquidity and those who argued that capital gains should also be taxed appropriately. Online respondents were relatively more inclined toward cutting transaction taxes in tandem with raising holding taxes.
On the long-term holding special deduction, the listening forums produced calls to reduce benefits for non-residents and set a cap given the already high deduction rate. Online respondents, by contrast, were largely opposed to any reduction, arguing the deduction serves as an inflation-adjustment mechanism and that scaling it back could lock up listings.
On special provisions for elderly homeowners and those relocating to regional areas, opinions ranged from calls to ease the tax burden on retired seniors to concerns that such provisions could be exploited as a tax avoidance tool. Online respondents also called for granting capital gains tax exemptions to elderly people who relocate outside major cities.
y2k@heraldcorp.com
