| Homeowners march in Seoul, Saturday, in opposition to the government's real estate policies focused on punitive taxation. Yonhap |
By Kim Se-jeong
Homeowners took their anger to the streets in Seoul on Saturday, opposing the government's recent moves to curb property speculation by employing a series of policies focused on punitive taxation.
“Not only tenants but also landlords are citizens,” according to a banner held by one of the protesters gathered outside the Korea Deposit Insurance Corp. in downtown Seoul.
“I fully complied with the government rules when I was in the rental business, but what I receive in return is a tax bomb. I can't believe this,” one protester was quoted as saying by Yonhap News Agency.
Another said “The new measures victimized everyone ― homeowners with multiple homes and those with no home. I feel the new tax is like a penalty (for owning multiple homes and renting them out).”
On July 10, the government announced an increase in the acquisition tax, comprehensive real estate holding tax and transfer income tax for homeowners to 12, 6 and 72 percent, respectively, the latest attempt to put a lid on skyrocketing prices for housing, mainly apartments. It also said it will provide more new apartments in Seoul and the metropolitan area.
The announcement followed another set of measures on June 17 which was centered on toughening mortgage loan regulations for home buyers.
In addition, the National Assembly with the Democratic Party of Korea majority is to review bills to ensure tenants the right to renew contracts easily with protections against deposit increases.
Experts have criticized the government's real estate policies as “defying the basic market principle of supply and demand,” and suggesting that they will only place an additional burden on both homeowners and tenants without effectively curbing property speculation.
Saturday's action by homeowners offers a glimpse into the complex dynamics surrounding housing issues in Korea.
Korea is a country with high population density ― it has a population of 51 million, equivalent to 516 residents per square kilometer.
The density is much worse in the capital and its surrounding area where most people want to live. According to government statistics, the population of Seoul and the surrounding Gyeonggi Province is estimated at 24 million, almost half that of the entire country.
People prefer to live in apartments in the affluent Seoul area, but apartments are in short supply and prices continue to rise beyond incomes. According to statistics, among 3.9 million households in Seoul in 2018, less than 1.4 million were apartments.
According to Budongsan114, an online real estate trade site, the average apartment price in Seoul was more than 800 million won during the fourth quarter last year, up 40 percent from the first quarter in 2017, proving the Moon government's policy a failure.