(News Focus) Rival presidential candidates fight over property taxes
SEOUL, Nov. 16 (Yonhap) – Rival presidential candidates from the ruling party and major opposition parties have proposed very different policies on property tax, one of the most sensitive election issues amid soaring house prices, raising questions about their feasibility.
Lee Jae-myung, the presidential candidate for the ruling Liberal Democratic Party, called for the introduction of a “property tax” on all land to fund his plan for a universal basic income.
Yoon Seok-youl of the main conservative opposition People Power Party, on the other hand, has proposed reconsidering the gross property tax, which is imposed on owners of multiple or high-end homes, to exempt owners of single-family homes. and possibly to discard altogether.
The promises are seen as the first test of politics between the two candidates in an election that many see as a referendum on the Moon Jae-in administration’s failure to tame an overheated real estate market.
As part of Lee’s plan, which the candidate first announced during his previous presidential candidacy in 2017, all landowners will be taxed for their land, bringing in around 30 trillion won ($ 25.5 billion U.S.) annual tax revenues and increasing the effective tax rate on real property. real estate ownership of 0.17% currently at 1%.
The additional income will be used to fund a universal basic income, while the higher overall tax rate will discourage people from speculating in real estate and help stabilize house prices, according to Lee’s campaign.
“Take a close look at who is against the basic income property tax which benefits 90 percent of the population,” Lee wrote on Facebook Monday, saying that under his plan 90 percent of the population will receive more than it pays.
“Oppose basic income property tax for fear that they are not among the richest 10% of landowners and will end up losing money by being fooled by vicious media and political forces corrupt, âhe said, arguing that his plan will also reduce polarization and income inequality.
Yoon, however, approached the issue from a different angle, saying the current tax system is pushing some single-family homeowners to sell their only property because they can’t afford to pay taxes on them.
The candidate pointed to gross property tax, which was introduced under President Roh Moo-hyun’s previous liberal administration in 2005 to equalize tax burdens for citizens.
The tax is separate from property taxes collected by local governments and is imposed on owners of multiple homes or high-end homes. In the case of owners of single-family homes, it is levied if the government-assessed value of the property exceeds 1.1 billion won.
In a Facebook post on Sunday, Yoon said he would review gross property tax when he takes office to ease the tax burden on property owners and lower the capital gains tax rate in order to reduce the tax burden on property owners. help increase home sales and stabilize their prices.
“Moon Jae-in’s government and the Democratic Party treat people who own high-priced real estate or multiple homes like criminals and speak as if imposing high taxes is an accomplishment of justice,” he said. wrote, noting that this year’s gross property tax invoices will be sent from next week.
âAround the same time next year, I will free you from worrying about being hit by the gross property tax bomb,â he said, adding that in the long run he expected. examine the possibility of absorbing gross property tax in property tax or allowing exemptions for owners of single-family homes.
The promises of the two candidates carry risks, according to experts.
In the case of Lee’s general land property tax, it is not clear whether a universal basic income is a suitable justification for a new tax.
Yoon’s gross property tax plans may face opposition from local governments, which are the recipients of tax revenues, and not from the central government.
Rival promises will also likely require parliamentary approval.