Seoul: Finance Minister Koo Yoon-cheol announced that the government will soon propose a comprehensive plan to "rationalize" the real estate taxation system, in response to rapidly rising housing prices in the wider Seoul area.

According to Yonhap News Agency, Koo stated during a press conference that the government will devise a property tax reform plan by considering factors such as encouraging capital flows into productive sectors, the principle of fair burden-sharing, and public receptiveness. This announcement was made during the introduction of the third major housing policy package under the Lee Jae Myung administration.

The proposed plan includes designating all 21 remaining districts in Seoul as speculative zones, effectively subjecting all 25 districts of the capital to stricter regulatory status. Additionally, twelve cities in Gyeonggi Province, which surrounds the capital, have been newly designated as regulatory zones.

Koo mentioned that the government will examine tax adjustments, including those related to property holding and transaction taxes. However, he emphasized that the direction and timing of any tax reforms would be determined after a comprehensive review of potential market impacts and tax equity.

Market watchers interpret this move as a potential shift towards higher property holding taxes, although it is expected that the government will adopt a flexible approach to its implementation schedule. While an immediate overhaul of the current tax structure is unlikely, this clear policy message may encourage property owners to list their assets, which could help stabilize the housing market.