South Korean President Lee Jae-myung stated on July 23 that the country's property tax would need to triple to reach advanced country levels, speaking at a public debate on real estate policy held at the KBS annex in Yeouido. The president attributed the need for reform to South Korea's property tax rates being significantly below international norms, noting that current levels have contributed to excessive housing price increases. Lee acknowledged that such tax normalization faces substantial political resistance, citing concerns that a threefold increase would trigger social unrest, while emphasizing the structural risks of maintaining low property taxes amid elevated real estate valuations.
President Lee Assesses Current Property Tax Levels
President Lee stated that normalizing South Korea's property tax to typical advanced country standards would require raising rates by at least three times current levels. "If we raise it threefold now, a situation almost like a riot would occur," Lee said, adding that if property taxes had been normalized in the past, housing prices would not have risen to current levels.
The president expressed concern that the accumulated structural problem of rising real estate prices combined with low property taxes could eventually lead to social shock. "It has already risen too much, and it is difficult to bring it down now," Lee said. "This problem will explode someday. We don't know which generation will face it, but it will give a tremendous shock to South Korea."
Lee emphasized the need to prepare for the future despite potential political costs, stating that political losses must be accepted to address long-term structural issues.
Differentiated Taxation Proposal Based on Residency and Property Type
President Lee outlined a differentiated tax system under consideration that would protect actual residents while deterring speculation. "There are various types: one residential home, one non-residential home, multiple homes, ultra-luxury homes," Lee explained. "We can think of a method where we set an appropriate holding burden based on a typical one-home standard, then provide exemptions for actual residence, and additional exemptions for working and middle-class housing."
The president indicated that regional factors, including rural areas, would also be considered in the reform framework. For luxury properties and speculative holdings, Lee suggested increased tax burdens. "Extremely expensive luxury homes, multiple homes, and holdings for clear speculative purposes can be aggravating factors," Lee said. "We are considering a phased differential system that applies both exemption factors and aggravating factors together. The most difficult question is determining what level is appropriate."
![President Lee Jae-myung speaking at the real estate policy public debate held at KBS annex in Yeouido, Seoul on July 23]()
FAQ
What property tax increase did President Lee Jae-myung propose on July 23?
President Lee stated that South Korea's property tax would need to triple to reach advanced country levels, speaking at a real estate policy debate at the KBS annex in Yeouido on July 23. He characterized this as normalization rather than strengthening, noting that current rates are significantly below international standards.
How does President Lee's differentiated taxation proposal work?
The proposal under consideration would establish a base property tax rate for typical one-home ownership, then apply exemptions for owner-occupied residences and additional exemptions for working and middle-class housing. Conversely, luxury properties, multiple homes, and speculative holdings would face higher tax rates through aggravating factors applied to the base rate.
