Lee defends softer property-tax plan after reform criticism

President Lee Jae-myung has defended the government's decision to soften a proposed property-tax change for people who own one home but do not live in it, rejecting criticism that the revision amounts to retreat from reform. The dispute centers on the comprehensive real-estate holding tax and whether non-resident single-home owners should face a lower basic deduction and a higher cap on annual tax increases.

According to Maeil Shinmun, the government had proposed cutting the basic deduction for this group from 1.2 billion won to 900 million won and raising the year-to-year tax-burden cap from 150 percent to 200 percent. The final proposal backed away from that tightening. Lee said the revision reflected public and political feedback and argued that critics were isolating one part of a broader tax package.

A softer line for non-resident single-home owners

Affected owners would face less of an immediate tax increase than under the earlier proposal. Politically, however, the reversal creates a harder question for the administration: how far it can use property taxes to favor actual residence over ownership without triggering resistance from homeowners and lawmakers. Lee pointed to falling housing prices in parts of Gangnam as part of his defense of a more flexible approach.

The argument also exposes competing goals inside housing policy. The government wants to discourage ownership patterns it sees as less connected to residence, but abrupt tax increases can create political and market resistance. Softening the deduction change reduces that near-term pressure while making the original distinction between resident and non-resident owners less sharp.

The debate now moves from the president's explanation to the legislation itself. The final tax bills and National Assembly review will determine which deduction and burden-cap provisions become law. Homeowners, tax advisers and housing-market participants will be watching for any further changes because relatively small shifts in thresholds can materially change annual tax liabilities for expensive homes.