Song Yong-gil says government should keep hands off real estate taxes

Song Yong-gil, a candidate in the Democratic Party of Korea's leadership race, said Wednesday that the government should leave real estate taxes alone, questioning why it would "stake everything" on 1 trillion won ($707 million) in tax revenue.

Appearing on KBS Radio's "Jeongyeok Sisa" that day, Song criticized rival candidate Jung Chung-rae's claim that President Lee Jae Myung's approval rating had dropped to the low 40s because core supporters had turned away. "He's a quack doctor giving the wrong diagnosis," Song said.

Song said the real cause was not the defection of core supporters but the loss of centrist voters. "The problem is that real estate is being handled badly," he said, pointing to housing policy as the main driver of the president's falling approval rating.

Song argued that the combined revenue from the comprehensive real estate tax and capital gains tax on single-home owners amounts to only 1 trillion won. "With 50 trillion won in additional tax revenue coming in, why stake everything on 1 trillion won? That is what I always tell the commissioner of the National Tax Service, the minister of Land, Infrastructure and Transport, and the deputy prime minister for economic affairs," he said.

He also questioned the rationale behind capping the long-term holding special deduction at 1 billion won and excluding non-resident owners from the benefit. "Someone might keep their one home in Seoul while working in Naju or Incheon," he said. "If you strip away the long-term holding deduction, they are not going to sell their house and emigrate to the United States — they will need to buy another home. How are they supposed to do that after paying capital gains tax?"

Song was equally critical of lending restrictions. "If you do not support loans, how are genuine end-users supposed to buy a home?" he said. "Think of how many people signed contracts only to be left stranded because interim and final payment loans fell through. That is why support is eroding."

Song noted that he had clashed with the Moon Jae-in administration over real estate during his time as Democratic Party leader, citing his push to raise the capital gains tax exemption threshold from 900 million won to 1.2 billion won. "At the time I said that if things stayed as they were, a quarter of Seoul residents would be subject to the comprehensive real estate tax, but Cheong Wa Dae opposed it," he said. "I fought to the end and put it to a vote at the general assembly of lawmakers, and we raised it to 1.2 billion won." He added that the current government's move to raise the threshold further from 1.2 billion won to 1.4 billion won — effectively exempting homes worth around 2 billion won from the comprehensive real estate tax — was the right call.