Punitive Real Estate Taxes Swayed Votes in Favor of Yoon

The current government's punitive real estate taxes appear to have swayed votes in favor of the People Power Party's Yoon Suk-yeol in the presidential election last week.

Yoon beat ruling-party rival Lee Jae-myung in 14 out of 25 districts of Seoul, and most of them are home to mid- to high-priced apartments that have been slapped with punitive taxes (US$1=W1,232).

Yoon won the biggest majority in wealthy Gangnam with 67 percent, followed by neighboring Seocho and Songpa with 65.1 percent and 56.8 percent and downtown Yongsan with 56.4 percent.

As of last year, the top four districts of Seoul with apartments costing more than W1.1 billion -- the threshold for punitive taxes -- were Gangnam (82,122), Seocho (62,728), Songpa-gu (55,064) and Yongsan (15,894 apartments). Also, Yangcheon and Jung, which also have high concentrations of higher-priced apartments, voted largely in favor of Yoon.

But Yoon fared poorly in Gangbuk, Geumcheon, Eunpyeong and Gwanak, where properties are cheaper.

Realtors say the vote results appear to reflect the anger of people who own just one home that they were nonetheless punished for the stratospheric price inflation the government's failed real-estate policies caused.

The assessed value of apartments in the capital increased 19.9 percent last year under new valuation criteria, and so did the number of homeowners who were suddenly treated as if they were unusually rich and had to be punished.

Market researcher Kim Kwang-seok said, "Slapping excessive taxes on single-home owners on unrealized profits was clearly a mistake."