Yoo Seong-min slams real estate tax overhaul as repeat of past failures, warns of jeonse crisis

Former People Power Party lawmaker Yoo Seong-min sharply criticized the government's real estate tax reform plan, which focuses on ultra-high-priced and non-owner-occupied properties.

Yoo took to social media Tuesday to criticize the plan, saying the Lee Jae Myung administration was simply repeating the "disastrous policy failures" of the Roh Moo-hyun and Moon Jae-in governments. "Because they haven't done their homework, they keep enthusiastically marking the wrong answers," he said.

He said the pattern amounted to a chronic ailment of Democratic Party administrations. "The president has reversed every promise he made to the people — just like the cynical joke: 'He said he wouldn't use taxes to control home prices, and people actually believed him,'" Yoo said.

Yoo said the core of the new real estate tax measures was imposing punitive taxes on ultra-high-priced and non-owner-occupied properties. "Property holding taxes on ultra-high-priced homes can be raised — that's possible. The problem is: how does a punitive holding tax on ultra-high-priced homes help the majority of middle-class and working-class people who want stable home prices and stable jeonse and monthly rent?" he said.

Yoo argued that the real issue in the real estate market was runaway home prices and jeonse and monthly rent costs in the greater Seoul area, and that a tax bomb on ultra-high-priced homes could not achieve those policy goals.

"If you raise holding taxes, you need to lower acquisition taxes and capital gains taxes so that transactions can happen in the market," he said. "But acquisition taxes were left untouched, and capital gains taxes were actually made heavier once the temporary one-to-two-year measures expire."

Yoo particularly warned that tightening taxes on non-owner-occupied homes could destabilize the jeonse and monthly rent market. "I wonder whether anyone has thought about how the market will react if punitive holding taxes and capital gains taxes are imposed even on single-homeowners simply because they don't live in their own property," he said.

Looking ahead, he painted a bleak picture. "If landlords evict tenants out of fear of non-occupancy taxes, those tenants will have nowhere to go. If even part of the tax increase is passed on through jeonse or monthly rent, tenants will bear the full burden," he said. "The jeonse and monthly rent crisis in the greater Seoul area is already serious — punitive taxes on non-owner-occupied homes will clearly make it far worse."

Yoo also invoked the Moon administration's record. "The public saw clearly what happened when the Moon government played word games, saying 'a home is a place to live, not something to buy,'" he said. "Policies that ignore human instinct and market instinct are destined to fail."

He added that even as the president and the Democratic Party rushed toward a real estate policy "whose failure is plainly foreseeable," officials at the Ministry of Economy and Finance, the Ministry of Land, Infrastructure and Transport, and the Financial Services Commission should at least apply the brakes — but said he had little hope for "soulless bureaucrats who only flatter." He called on the People Power Party to draft and present an opposition alternative on real estate policy before the tax reform bill reaches the National Assembly, and to persuade the public why the party represents the better option.

The Ministry of Economy and Finance announced its "2026 Tax Reform Plan" on Monday, calling for a phased increase in the comprehensive real estate tax rate on ultra-high-priced homes and a reduction of benefits for non-owner-occupied properties.

The basic deduction for the comprehensive real estate tax will be applied on a tiered basis depending on whether the owner lives in the property. The deduction for owner-occupiers with a single home will rise from the current 1.2 billion won ($839,000) to 1.4 billion won, while the deduction for non-owner-occupiers with a single home will be cut from 1.2 billion won to 900 million won.

For multi-homeowners, the basic deduction will also be applied on a tiered basis according to property value, effectively reducing the overall deduction. The tax assessment framework will also shift from a system that varied rates by the number of homes owned to one based on property value.