Oh Se-hoon says supply, not taxes, is surest way to stabilize housing market

Seoul Mayor Oh Se-hoon said the government's proposed real estate tax overhaul risks stoking further market anxiety rather than bringing stability, and said the surest way to calm the market is supply, not taxes.

Oh made the remarks Thursday morning in his opening address at the "Public Forum for Real Estate Normalization," held at Seoul City Hall. He asked attendees to speak candidly about their concerns and frustrations, and used the occasion to lay out the Seoul Metropolitan Government's position on the proposed tax reforms.

"I am worried that this package will deepen market anxiety rather than stabilize it," Oh said. "There is no visible plan to increase supply, yet the tax burden has only grown heavier." He added that calling the situation — where buying a home is taxed and selling one is taxed — a "tax hell" is no exaggeration.

Oh said the proposed overhaul of the long-term holding special deduction would send significant ripples across the entire housing market.

"Going forward, simply holding a home for a long time will no longer be enough to qualify for tax benefits — owners will need to actually live in the property," he said. "That makes it advantageous for landlords to evict tenants and move in themselves." He added that jeonse and monthly rent supply would inevitably shrink as a result, pushing rental costs higher, with the burden ultimately falling on ordinary people and young people who depend on the rental market.

Oh said that if taxes aimed at ultra-high-end properties end up destabilizing the mid-tier housing market and the lease market as well, "that is not market normalization — it is another form of distortion."

"We need to correct course now," Oh said. "The surest way to stabilize the market is supply, not taxes." He said policies that suppress demand through taxation and policies that ease anxiety through supply have entirely different starting points and outcomes, and that the market can only stabilize when people believe more homes are coming.

He said the Seoul Metropolitan Government would not retreat a single step from that principle, and pledged to let the market function normally rather than suppress it, and to open the path to supply rather than add more regulation.

Oh closed by urging the government to take seriously the urgent voices heard at the forum. "Policy that ignores conditions on the ground can never protect the lives of the people," he said.