2022 REAL ESTATE HOLDING TAX FROZEN

[Anchor Lead]

The ruling Democratic Party and government have decided to virtually freeze real estate holding taxes next year, in an effort to ease the public’s tax burden. But the move is drawing criticism as being election-driven because it goes against previous policy guidelines.

[Pkg]

The government and ruling party’s latest decision comes as the comprehensive real estate tax and property tax are expected to see a sharp increase next year. Home prices are rising and the difference between officially appraised property prices and actual market prices will also be reduced. This will inevitably raise the assessed value of homes that serves as the basis for taxation.

[Soundbite] Song Young-gil(DP Chair) : "It’s become necessary to considerably adjust various tax and insurance burdens in accordance with real demand."

Therefore, the DP and the government have decided to either consider setting a tax ceiling so they won’t rise by more than a certain percentage next year or they will consider applying this year's officially appraised property price in calculating next year's real estate holding tax. Other measures under review include the flexible application of a tax discount through fair market value ratio and allowing senior citizens who own one house to postpone their tax payments. Officially appraised apartment prices for next year will be announced in March, the month when the presidential election takes place. The government and DP intend to reduce next year’s tax burden no matter how steep official prices may rise. The stance is a far cry from the previous position and principles held by the party and its presidential candidate Lee Jae-myung.

[Soundbite] Lee Jae-myung(DP Presidential Candidate(KBS 1 Radio)) : "We need to make policies that ease public suffering and improve their lives, rather than experimenting policies on the people."

The People Power Party accused Lee of flip-flopping and questioned his basic knowledge in the real estate tax system.

[Soundbite] Kim Chong-in(PPP Election Committee Chief) : "To win over public sentiment, they talk about freezing property tax and officially appraised real estate prices while also pledging to absorb all gains from speculative activities by introducing a land ownership tax."

The Justice Party's presidential candidate Sim Sang-jung also called the DP’s move a clear policy reversal, noting that people hit hard by the pandemic are not even subject to the comprehensive real estate tax.