President Lee Jae Myung Reaffirms Property Tax Hike, Seeks Consensus to Stabilize Real Estate Market

President Lee Jae Myung said Thursday that there is broad consensus on the need to raise property holding taxes, reaffirming his commitment to "normalizing" the runaway real estate market.

The president made the remarks at a public discussion on real estate policy as the government prepares to revise real estate taxes to rein in soaring home prices.

The discussion, which was televised live, brought together around 140 participants, including YouTubers, internet users, real estate agents and representatives from the financial, media and academic sectors, along with Prime Minister Han Seong-sook and other Cabinet members.

Lee described stabilizing the real estate market as "one of South Korea's biggest challenges."

"In fact, there is broad consensus on the need to strengthen real estate taxes," he said, adding the key question remains how much they should be raised.

To bring South Korea's property holding taxes in line with those of advanced countries, the rates would have to be tripled, but doing so would be tantamount to provoking a "riot," Lee said. "In the end, a compromise would be needed," the president added.

The discussion comes as the government reportedly plans to announce a revision to property holding taxes as early as late this month in a bid to rein in runaway home prices.

One of the key issues on real estate policy will be how to determine the level of home prices for applying higher property holding taxes, as the government is expected to raise the tax burden on owners of high-value homes or multiple homes as a way to cool housing demand.

"A home purchased for owner-occupation should be protected under policy, but some owners of multiple homes clearly have the purpose of asset accumulation," Lee warned, stressing the need to increase the tax burden on those who purchase additional homes for investment purposes.

Still, the president said he does not intend to artificially drive down home prices in a way that goes against market supply and demand.

"(The goal) is to normalize (the market) to prevent abnormal supply and demand" from distorting prices, he added.

Lee also referred to Japan's real estate market boom and subsequent collapse in the 1990s, saying the South Korean housing market may be heading toward that kind of a market bubble.

"In fact, quite a few people are worried that we are heading toward that kind of peak. And many people share the view that we need to take countermeasures at this point," the president said.

Lee also voiced concern over South Korea's exceptionally high level of investment in real estate.

"Looking at objective figures, real estate asset prices and the share (of investment in real estate) may be among the highest in the world," he added.