This study examines the land policy options adopted by the government.
Rising land prices are inevitability in the course of rapid industrialization, but due to inadequate institutional and administrative measures, Korea has experienced problems, such as land speculation, housing shortages and wealth concentration. People tend to perceive that direct and indirect interference is unavoidable in fundamentally correcting these problems. Measures have been implemented or being pursued towards this end. In particular, both policy-makers and the general public regard the suppression of rising land prices and the prevention of land speculation as the main goal of land policy, but some initiatives based on this belief often cause negative side effects without generating a significant change, because they counteract market principles.
This study argues that the suppression of rising land prices and the prevention of land speculation—among many problems related to land—are not appropriate as policy goals. The most serious problem is the concentration of land ownership and the related distribution problems. It would be difficult to solve the problem with direct, sweeping changes in land ownership. The best method would be to set up a system that enables thorough taxation on capital gains from land. The most important implication of the suggested change in policy goal is that it is important to deviate from existing policy to solve land problems by distinguishing the land for speculation with laws and disadvantaging its transaction. This study proposes to treat all land the same, and instead, heighten the effectiveness of the comprehensive real estate tax, whose effects will provide definite solutions to land issues, while minimizing adverse effects on the economy.
Immediate methods to improve the effectiveness of taxation on land include improvement of the accuracy of land price assessments. If the resistance that may be caused by rapid increase in land holding tax is heightened, the schedule for readjusting tax assessment standards can be slowed down. Our principal task is to establish a system for accurate assessment of land prices. Without it, any new initiatives, such as the comprehensive real estate tax, development shares, and the land excess profit tax, will ultimately fail. The land problem will continue to remain as the main source of class conflicts.
토지문제의 경제적 해석과 정책대안의 검토(Economic analysis of land issues and review of policy options)
|Series Title; No||정책연구시리즈 / 90-01|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < General|
|Holding||KDI; KDI School|