The takeaway from the July 23 presidential real estate town hall was this: strengthen the holding tax, but do not rush a threefold increase. President Lee Jae-myung agreed with the direction of raising holding taxes, yet drew a line at lifting them to an “advanced-economy level” (roughly triple), warning it would cause “something like a riot.” Instead he signaled differentiated taxation on ultra-high-end, multiple-owned, and non-resident homes, along with tighter jeonse (lump-sum lease deposit) loan rules. The government plans to hold one more forum on July 27, led by Prime Minister Han Sung-sook, and to unveil a tax overhaul in late July or early August. 🏛️

TL;DR 📝

  • At the July 23 town hall, President Lee backed stronger holding taxes but said an “advanced-economy-level threefold hike would spark a riot” — meaning a measured pace, with differentiated taxes on ultra-high-end, multiple, and non-resident homes.
  • A follow-up forum led by PM Han Sung-sook takes place July 27 at 4 p.m. at the Korea Chamber of Commerce and Industry, with a tax overhaul due in late July or early August.
  • The backdrop is a metro-area “triple surge” — Seoul apartment sale prices are up 6.03% and jeonse up 6.01% this year, with Seongbuk-gu (+9.87%) and Nowon-gu (+7.13%) leading.

🗣️ Exactly What Did the President Say About the Holding Tax?

President Lee acknowledged the need to strengthen the holding tax while staying cautious on the size and pace of any hike. At the real estate policy town hall held July 23 at the KBS annex in Yeouido, Seoul — attended by about 140 people including experts and ordinary citizens, and running roughly 190 minutes — Lee said, “It is broadly agreed that the holding tax needs to be strengthened,” while adding, “The key is over what range, by how much, and with what differentiation.”

The most closely watched moment concerned raising the holding tax to an advanced-economy level. “To tax holdings at an advanced-economy level, you would have to raise it threefold, and then something like a riot would break out,” Lee said, clearly ruling out an abrupt jump. The message appears to be that the direction stays toward strengthening, but the pace of implementation will be moderated.

🎯 What Happens to the ‘One Good Home’ — The Shape of Differentiated Taxation

The taxing principle Lee laid out is differentiation based on who owns a home, of what value, and for what purpose. Lee signaled a direction of imposing a heavier holding burden than usual on “ultra-high-end homes, multiple homes, and clearly speculative non-resident homes.”

Where to draw the “ultra-high-end” line, however, sharply divided opinion at the forum. Views ranged from treating homes from a market value of 1 billion won as ultra-high-end, to setting the bar at 3 billion or 5 billion won and above. The logic that even an owner-occupied single home could face an added burden if it is ultra-high-end clashed with the concern that the tax burden would ultimately be passed on to tenants. Because where the line falls will greatly change the impact on demand for the so-called “one good home,” this point is the key variable in the tax overhaul.

💳 Will Jeonse Loans Be Tightened Too? — A Cause of Rising Prices the President Named

Lee also hinted at tighter jeonse loan rules. “In the name of helping ordinary people find jeonse easily, we extended jeonse loans almost without limit,” he said, adding, “If jeonse becomes too easy, home prices all go up in the end. It is one of the reasons apartment prices have risen so much.”

This is an extension of the loan-tightening stance carried through last year’s June 27 and October 15 measures. At the forum, participants noted that even as loans for buying a home are blocked, an already-acquired property can be used as collateral for a general-purpose loan to circumvent the rules; Lee asked, in effect, whether business loans might also need a certain cap. Yet there is considerable pushback against tightening rules on genuine end-users such as young people and newlyweds too, leaving the question of how to separate regulation from support.

🗓️ Another Forum on July 27, Then the Tax Overhaul

The government will hold one more forum on July 27 to gather additional views before finalizing its measures. At 4 p.m. that day, at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, another real estate policy town hall will be held, chaired by Prime Minister Han Sung-sook. It will focus on issues not fully covered at the presidential forum, taking further expert input on topics such as strengthening the holding tax and tax resistance, differentiated taxation for owner-occupiers versus multiple-home owners, heavier capital gains tax on multiple owners and easing the “lock-in” of listings, support for newlyweds and fixing the “marriage penalty,” and new land supply.

The first item to take clear shape will be the tax overhaul, expected in late July or early August. Detailed measures on supply and finance are also likely to emerge before long. Earlier, from July 14 to 16, sector-by-sector forums were held over three days by the Ministry of Land, Infrastructure and Transport (supply), the Financial Services Commission (finance), and the Ministry of Economy and Finance (tax); this town hall pulled those discussions together with several thousand citizen proposals submitted via the real estate website.

📊 Why the Hurry Now — The ‘Triple Surge’ Backdrop

Behind the government’s back-to-back forums is a “triple surge,” in which sale, jeonse, and monthly-rent prices are all rising at once. As shrinking new-build move-ins, expanded liquidity, and a jeonse shortage overlapped, Seoul apartment sale prices have risen 6.03% and jeonse 6.01% so far this year. Prices jumped especially hard in relatively mid- and low-priced districts such as Seongbuk-gu (+9.87%) and Nowon-gu (+7.13%), making it that much harder for ordinary people to buy a home.

The government tightened loans and expanded regulated zones through last year’s June 27 and October 15 measures, but was judged too weak to stabilize the market. Supply measures were pursued in parallel, yet there is a long lag before actual move-in, and delays and opposition continue across the third-phase new towns and major project sites. On July 19, Presidential Policy Chief Kim Yong-beom said on a broadcast, regarding the triple surge, “I am sorry to many citizens,” noting that “the supply-demand and other conditions in real estate are very far from easy.”

Meanwhile, opinion split over the forum’s format. Alongside praise for the range of views heard, some criticized the president’s outsized share of the talking. Opposition figures charged that it was a session surrounded by supporters where the president said only what he wanted to say.

🧭 The Bottom Line

This town hall was less a place where new policy was finalized than one where the government signaled which way it intends to go. In short, three points. First, the holding tax will be strengthened, but abrupt approaches like a “threefold hike” are off the table, with the pace moderated. Second, the move is toward differentiated taxation that adds burden on ultra-high-end, multiple, and non-resident homes — but the “ultra-high-end” threshold (1 billion, 3 billion, 5 billion won) remains the biggest sticking point. Third, tightening circumvention routes such as jeonse loans and business loans is under joint review.

The things to watch are which issues get added at the July 27 prime-minister-led forum, and how concretely the ultra-high-end threshold and the scale of differentiated taxation land in the late-July-to-early-August tax overhaul. The direction is set, but the numbers are still blank — so how the actual tax and loan conditions change will only be clear once the overhaul is out.

※ This post is for informational purposes only and is not investment advice.

Sources