Lim Kwang-hyun, commissioner of the National Tax Service who has called for broader inheritance tax deductions since his days as a lawmaker, was named on the 14th as the second chief of staff to President Lee Jae-myung, drawing attention to the direction of future tax policy. While the Presidential Office's policy bureau serves as the control tower for economic policy, the chief of staff also sits close to the president and can offer political advice on the full range of state affairs. As a tax expert, Lim has consistently argued that the inheritance tax burden on middle-class households passing down a single home should be eased while tax benefits concentrated on ultra-expensive homes should be scaled back, prompting expectations that he could influence tax changes closely tied to household finances.
Inheritance tax is the area drawing the most immediate attention. In 2024, while serving as a lawmaker for the Democratic Party of Korea, Lim was the lead sponsor of a bill to raise the lump-sum inheritance deduction to 800 million won from 500 million won and to lift the minimum spousal deduction to 1 billion won from 500 million won. Combined, the two measures would have expanded deductions to 1.8 billion won. The aim was to reflect the reality that rising home prices and consumer prices have pushed the inheritance tax burden — once seen as a levy on the wealthy — onto middle-class households.
That position has not changed since he became tax commissioner. At a parliamentary audit of the National Tax Service on the 13th of this month, Lim responded to a question from Democratic Party lawmaker Lee Kwang-jae, who asked whether the spousal inheritance deduction and the lump-sum deduction, both largely unchanged for nearly 30 years, needed updating. "I fully agree with the intent of your remarks," Lim said.
Lim has also told people around him that expanding inheritance deductions is not a tax cut for the rich but a policy to ease the burden on middle-income households, according to sources. Holders of very large fortunes are more interested in lowering the top rate or in the family business succession deduction, the reasoning goes, while wider deductions offer practical relief to middle-class households whose inheritance tax bills have grown along with home prices. He is said to have expressed regret in particular that pursuing the expansion of inheritance deductions alongside the current overhaul of property taxes could have softened the backlash against tighter taxation on real estate.
By contrast, he has been supportive of trimming tax benefits for ultra-expensive homes. He has described the imposition of a 1 billion won ceiling on the long-term holding deduction for capital gains tax as the policy likely to have the greatest impact on the market. The tax revision plan the government announced in August of this year called for restructuring the long-term holding deduction around actual residence and capping the deduction at 2 billion won in 2028 and at 1 billion won from 2029. Tighter residency requirements can be met by actually living in the home, the thinking goes, but placing a ceiling on the deduction amount can directly affect decisions by owners of ultra-expensive homes in areas such as Seoul's Gangnam district on whether to sell.
He also holds the view that tax and financial regulations alone have limits in resolving the problem of home prices, and that the fundamental solution is expanding housing supply. On taxation of business succession, he is said to have taken a positive view of reducing capital gains tax when owners sell a company to a third party rather than hand it to their children, while raising strong concerns about the possibility that the family business succession deduction could be used to pass down real estate through loopholes involving large bakery cafes and similar businesses.
After his nomination as chief of staff, Lim said, "Carrying forward the achievements of the Lee Jae-myung government and delivering changes in people's lives that they can feel firsthand is the calling given to me." He added, "Just as each day is urgent for the people, each day at the Presidential Office must be urgent. I will devote all my strength to changing the exhausting days our people face."
The main policies he pursued as tax commissioner are also seen as closely connected to daily life. He had the agency identify about 5,700 single-home owners holding property jointly with a spouse who would benefit from applying for a comprehensive real estate holding tax exemption, and about 2,900 who would be better off withdrawing their application, and notify them of their expected tax bills in advance. He also actively pushed to cut the withholding tax rate on income from personal services, such as delivery riders, to 2.2% from 3.3%. As a lawmaker, he raised the need to introduce indexation that would adjust income tax brackets in line with inflation.