Will the Long-Term Special Holding Deduction Survive? Key Insights on Potential Reforms

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The Democratic Party of Korea has denied that the party or the government has discussed abolishing the long-term special holding deduction — an issue sparked by President Lee Jae‑myung’s remarks. Still, the party left open the possibility of reform, saying it will not allow excessive benefits for owners of non-resident properties.

On the 22nd, Democratic Party spokesperson Kang Jun‑hyun told reporters after a senior party-government meeting, “The People Power Party is making baseless claims about the long-term special deduction.” He said there have been no concrete party-government discussions on reforming real estate tax policy and that the party and government are listening to a range of public opinion. Kang added that the opposition has been misleading the public by suggesting the deduction for owner-occupied single-home residents would be eliminated — a discussion that has not taken place.

Kang nonetheless left room for possible changes. “Our direction is guided by the principle of ending the damaging myth of real estate omnipotence,” he said, adding that the party opposes excessive benefits for multi-home landlords or owners of non-resident properties. If reform talks begin, the party could consider excluding multi-home owners — and possibly non-resident single-home owners — from the deduction. A Democratic Party official said, however, that the party’s position is to preserve benefits for non-resident single-home owners who are not engaging in speculation.

Separately, the Democratic Party, the government and the Blue House met at the prime minister’s residence in Samcheong-dong on the 22nd and agreed to roll out next month an insurance product that discounts premiums for vehicles participating in a five-day license-plate rotation program designed to save energy amid the Middle East crisis.

Kang said non-life insurers will introduce a special endorsement next month that reduces auto insurance premiums for drivers who take part in the rotation, rewarding citizens who voluntarily conserve energy.

He added that officials will prepare measures this month to ease crowding on public transit and broaden participation in energy-saving efforts, and that they will develop green-consumption plans to stimulate travel during the May holidays.

The government will also actively support crude oil imports via Saudi Arabia’s Yanbu port and will promptly implement the naphtha import price-difference support program included in this supplementary budget — a 670 billion KRW (approximately $502.5 million) measure. Officials plan to introduce this month a fast-track rule allowing case officers to apply for livelihood benefits on behalf of households in urgent need.