Top presidential official hints at powerful steps to curb speculative property demand

SEOUL, A senior presidential official raised the need to curb speculative demand in the property market Thursday, vowing to take stronger measures if needed.

Jang Ha-sung, the presidential chief of staff for policy, made the remark at a meeting with senior officials from the government and the ruling Democratic Party (DP) over the economy.

"The government will step up its efforts to thoroughly curb speculative demand in the property market while protecting real buyers," Jang said at the start of the meeting.

"If needed, the government will consider introducing strong measures (to curb property speculation). We will take necessary steps to stabilize the housing prices and boost residential stability for ordinary people," he added.

The government announced Monday that it has designated four districts in Seoul as "speculative" areas subject to stricter financial and other regulations in a bid to curb the overheated market.

Apartment prices in Seoul, the capital of nearly 10 million people, have shot up in recent weeks following Seoul Mayor Park Won-soon's announcement in July of a plan to redevelop Yongsan and the financial district of Yeouido. He said Sunday he will suspend the plan.

Lee Hae-chan, the chief of the DP, raised the need to raise real estate taxes for the owners of multiple houses or expensive homes, saying that bold policy responses are needed to stabilize the property market.

"I see the need to strengthen comprehensive real estate taxes for the owners of more than three houses or high-value homes. I hope that the government will strongly consider the proposal," Lee said at his first meeting with key officials from Cheong Wa Dae and the government.

In July, the government said it plans to hike real estate taxes in a move that it said will help narrow the widening income gap and curb rising housing prices.

Under the proposed tax code revision for next year, the comprehensive real estate tax rate for properties valued at 600 million won (US$539,811) or more will be raised by between 0.1 percentage point and 0.5 percentage point, with the maximum rate to be raised to 2.5 percent from the current 2 percent.

The real estate tax scheme, first introduced in 2005 under former liberal President Roh Moo-hyun, has long been controversial. Taxation on owners of high-priced homes or multiple properties during the Roh administration faced strong backlash, which led to a fall in the then-liberal government's approval rating.

As for the economy, the participants agreed to tackle possible price instability in a pre-emptive manner ahead of the Chuseok fall harvest holiday in September as the consumption of some foodstuffs usually jumps to prepare for holiday dishes.

They also decided to expand support for small firms and mom and pop shop owners by more than 6 trillion won during the harvest holiday.

Meanwhile, the participants agreed to push for operating a joint policy consultation body involving ruling and opposition parties and the government starting in November.

Earlier this month, the rival parties accepted President Moon Jae-in's proposal to form the consultative body in an effort to promote what the president calls joint governance.

Source: Yonhap News Agency

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