PPP blasts Lee government's 'real estate hell,' demands loan deregulation

The People Power Party on Monday urged the Lee Jae Myung government to ease loan restrictions and roll back proposed tax hikes on real estate, saying it must "abandon the notion that taxes and regulation can beat the market."

Party spokesperson Jo Yong-sul, in a statement Monday, cited the Moon Jae-in government's heavy surcharge on comprehensive real estate taxes for multi-home owners, saying "anti-market policies caused home prices to surge in Seoul and the greater metropolitan area."

"Rather than reflecting on those failures, the current administration has reached for yet another tax-centered regulatory tool," Jo said. "If excessive government intervention and an ever-expanding tax burden are repeated, the same failure will follow. Stop turning South Korea's real estate market into hell."

Rep. Na Kyung-won also criticized the government on Facebook that day, saying it was "blocking ordinary citizens' loans and property transactions with a web of regulations while those in power pocket gains from selling their own real estate."

Na said President Lee Jae Myung appeared to have sold his home in Bundang through a "zero-interest collateral deferred-payment arrangement" just before the abolition of the long-term holding special deduction — a move she said was aimed at avoiding roughly 500 million won ($341,000) in taxes.

"It is shameless for President Lee to talk about tripling the property holding tax the moment after he sold his house," Na said. "The introduction of leveraged ETFs already hurt ordinary citizens — is he now trying to apply a triple-leverage hike to the property holding tax as well?"

Na went on to say the party "firmly rejects any tax increase that kills ordinary citizens twice over," and urged the government to "immediately allow citizens normal access to bank loans, which have been blocked by regulation."

Floor leader Ahn Cheol-soo also called for mortgage deregulation via social media.

"Even President Lee's own 2.9 billion won apartment could only secure 200 million won in bank financing, which is why he ultimately had to set up a 1.77 billion won collateral mortgage," Ahn said. "The most urgently needed real estate policy right now is: just let people borrow."

He urged the government to ease its annual loan volume management targets this year and at least double the ceiling on home mortgage loans, adding that the loan-to-value ratio for end-user buyers should also be raised substantially.