The National Assembly on Tuesday approved a package of real estate-related bills that would introduce the heftiest-ever levy on homeowners, despite resistance from opposition lawmakers.
A total of 11 bills passed through the parliament during Tuesday’s voting session pertaining to income tax, corporate tax and property ownership tax on multiple-home owners, as part of the ruling Democratic Party of Korea’s campaign to deliver nonhomeowners a better chance at owning a house.
Coming just a few days after the passage of two tenant rights bills, the legislative changes are expected to give traction to the government’s efforts to cool the overheated real estate market. The conservative opposition United Future Party, outnumbered by the rival faction that holds 176 of the 300 parliamentary seat, cried foul, labeling the series of enactments the “tyranny of the majority.”
Prior to the full-floor session, Democratic Party Floor Leader Kim Tae-nyeon pledged stern legislative actions against speculative forces disturbing the real estate market. “We will open up era of ‘one house for one household’ where every citizen can have their own house.”
“The Democratic Party will make unwavering efforts until the housing market stabilizes based on three principles, which are an extradition of speculation, redemption of profit from housing speculation and protection of houseless people,” he said.
Under the bills, the gross real estate tax levied on owners of three homes, or two homes in regulated areas, will increase up to 6 percent. Targeting short-term profit-takers, taxes on those who buy and sell houses in less than two years will be raised.
Capital gains from selling houses will be taxed at up to 70 percent of gains if an owner sells a house within a year after purchasing the house. Those who buy their first homes will get a 50 percent discount in the acquisition tax under the bills.
To tighten monitoring on the rental property market and protect the rights of tenants, landlords and tenants are obligated to report details of their transactions to their local government within 30 days of signing a contract.
Rep. Choo Kyung-ho of the United Future Party criticized the bills, saying what the real estate market needs is a tax reduction.
“To stabilize the market, we have to decrease the transfer tax to induce people to put their property on sale,” he said.
Also passing the parliament Tuesday are follow-up bills for establishing an independent agency tasked with investigating corruption allegations against high-ranking government officials. With their passage, the establishment of the Corruption Investigation Office for High-Ranking Office is expected to pick up pace, giving headway to President Moon Jae-in’s prosecution reform plan.
Lawmakers passed bills mandating the chief of the investigation agency be subjected to a confirmation hearing held by the National Assembly. The bills also allow the Legislation and Judiciary Committee, one of the National Assembly standing committees, to deal with bills and issues related to the envisioned agency.
The investigative body aims to check the prosecution’s excessive power by launching probes into high-profile corruption scandals and having the right to indict state prosecutors, judges and senior police officers.
The body was expected to be launched in mid-July, as a main bill was passed late last year, but resistance from the main opposition United Future Party put brakes on the plan as the party refused to cooperate in recommending nominees to head the agency.
Under a new rule, the National Assembly speaker has a mandate to swiftly form a recommendation committee to pick chief nominees, while a negotiation body in the Assembly is required to recommend committee members within a period of time specified by the National Assembly speaker.
By Park Han-na (email@example.com