Ruling party lawmakers blast government tax reform plan at closed-door caucus

Lawmakers from the Democratic Party of Korea unleashed sharp criticism of the government's 2026 tax reform plan and housing supply measures at a party caucus Thursday, with members representing Greater Seoul constituencies leading the charge. Several warned that the proposals could prove politically damaging, with some saying the party was "in crisis" and that pressing ahead as planned would lead to electoral disaster. Calls were also made to scrap or delay until after the next general election the policy targeting single-home owners who do not live in their properties.

The closed-door caucus, held at the National Assembly for about two hours and 20 minutes, opened with policy chief Han Jeong-ae presenting the government's proposals before lawmakers took the floor for open debate.

Rep. Lee Yeon-hee, chair of the party's strategic planning committee, and 12 lawmakers with Greater Seoul constituencies spoke during the debate. Most strongly argued that the tax policy on non-resident single-home owners needed to be revised.

One lawmaker said the reform plan had undermined trust in President Lee Jae Myung's stated principle of not using taxation as a real estate policy tool, calling the proposal "a tax hike in effect."

A lawmaker representing a constituency along the Han River belt said the current mood made the next general election and the Seoul mayoral race "extremely difficult." Treating non-resident single-home owners as adversaries and debating whether to strip their tax benefits amounted to "a blunder that could alienate the Democratic Party's core support base — people in their 30s and 40s," the lawmaker said.

A lawmaker from Gyeonggi Province said the party "reportedly can't win even if the Seoul mayoral election is held again," adding that Seoul and nearby major cities were hemorrhaging support over real estate and that the new policy was "like pouring fuel on the fire."

Rep. Jeon Hyeon-hee (Seoul Jung-gu and Seongdong-gu A) said after the caucus that she had argued non-resident single-home owners should also be protected, adding that "most Seoul lawmakers seem to share a similar view." Rep. Kim Young-bae (Seoul Seongbuk A) said the far greater number of voices favored a broad direction of raising property holding taxes modestly while lowering capital gains taxes, including on the non-resident single-home issue.

Some lawmakers questioned the very rationale for pursuing tax reform at all. Rep. Heo Yeong (Gangwon Province — Chuncheon, Cheorwon, Hwacheon and Yanggu A) warned that the plan would end in disaster, asking, "Why are we touching taxes when surplus revenue is already at 100 trillion won ($70.7 billion)?"

On the government's housing supply policy, lawmakers raised the need for fiscal spending, including from surplus revenue. Rep. Kim Nam-geun (Seoul Seongbuk B) said injecting 5 trillion won in public funds could leverage as much as 15 trillion to 20 trillion won from the Korea Land and Housing Corp.'s housing and urban fund. He called for expanding the agency's workforce and committing significantly more fiscal resources to ease the housing crunch in the metropolitan area.

Lawmakers from outside the Greater Seoul area voiced a different kind of frustration to reporters — a disconnect between the government's real estate policies and the realities of their own districts. One lawmaker representing a South Jeolla Province and Gwangju constituency said there were no apartments priced at 600 million won or above in the area, while another from the Yeongnam region said properties worth 4 billion won simply did not exist in their district.

Floor spokesperson Lee Ju-hee said after the caucus that "the overall intent of the lawmakers is not to oppose the government's plan outright, but to call for improvements," adding that the party would do its best to craft a proposal "that does not leave the public feeling they have been treated unfairly."

President Lee's approval rating for his handling of state affairs fell to 49 percent following the announcement of the government's tax reform plan — the lowest since he took office.