South Korea to tighten tax breaks on ultra‑luxury homes, boosting capital gains levies
The South Korean government is reviewing revisions to the long‑term holding special deduction (장특공제). The proposed changes would scrap the 10‑year holding requirement and cap the deduction at 1 billion won. experts estimate that for apartments priced above 40 billion won, the capital‑gains tax could rise two to five times the current amount. Simulations show the tax on the 압구정현대 complex would jump from roughly 3.5 billion won to about 15.4 billion won, while the 한남더힐 project could see a rise from 6.7 billion won to over 31 billion won.
A separate survey of 1,602 South Koreans found 56 % expect house prices to increase in the second half of the year, a four‑point rise from the first half. Respondents cited core‑area apartment price gains and worsening supply shortages as the main drivers. At the same time, holding‑tax (종합부동산세) payments on high‑value units such as the 반포자이 84 m² apartment have already hit record levels, with the 2023 estimate at 18.1 million won, a 40 % increase over the previous year. Analysts warn that further adjustments to tax rates, market‑value ratios and assessed‑price realism could double the burden for the most expensive properties. President Lee Jae‑myung has called for raising the effective holding‑tax rate on ultra‑luxury homes to about 1 %.
Entities: Apgujeong Hyundai · Banpo Jae · Hannam The Hill · National Tax Service · Real Estate 114 · Seoul · South Korean government · 반포자이 · 압구정현대 · 한남더힐
Claims
What the coverage asserts, and how well corroborated each claim is across sources.
- [○ 1 SOURCE] Under the proposed change, capital‑gains tax on apartments priced over 40 billion won could increase by two to five times. (tax simulation)
- [○ 1 SOURCE] For a Banpo Jae 84 ㎡ unit bought for 1.18 billion won and sold for 48.3 billion won, current capital‑gains tax is 212.78 million won; with the 10 billion won cap it would rise to about 789.1 million ₩ (tax simulation)
- [○ 1 SOURCE] The South Korean government is considering removing the holding‑period requirement for the long‑term holding special deduction and limiting the deduction amount to 10 billion won. (government tax reform review)
- [○ 1 SOURCE] Proposals include raising the effective holding‑tax rate for luxury apartments to about one percent. (policy discussion at presidential real‑estate forum)
- [○ 1 SOURCE] Survey respondents also expect rent prices to increase, with jeonse expectations rising to 61.86 % and monthly rent expectations to 65.04 %. (Real Estate 114 survey)
- [○ 1 SOURCE] 56 % of South Korean respondents expect house prices to rise in the second half of 2026, a 4‑point increase from the first half. (Real Estate 114 survey)
- [○ 1 SOURCE] The estimated 2023 holding‑tax bill for a Banpo Jae 84 ㎡ unit is 18.1 million won, a 40 % increase over the previous year and a record level. (tax simulation by Shinhan‑Premiere‑Pathfinder)
- [○ 1 SOURCE] The main reasons cited for expected price rises were core‑city price gains (32.33 %) and supply shortages in Seoul (16.95 %). (Real Estate 114 survey)
- [○ 1 SOURCE] 61.86 % of respondents expect higher jeonse prices and 65.04 % expect higher monthly rent in the second half of 2026. (public opinion poll)
- [● 2 SOURCES] The government is reviewing elimination of the holding‑period requirement for the long‑term special deduction and setting a cap of 1 billion won on the deduction amount. (tax policy proposal)
- [○ 1 SOURCE] The projected 2023 holding tax for a 84 m² unit in the 반포자이 complex is 1.81 million won, a rise of more than 40 % from the previous year. (tax simulation)
- [○ 1 SOURCE] Survey respondents cite core‑area apartment price rises (32.33 %) and worsening supply shortage in major cities (16.95 %) as the main reasons for expected price increases. (public opinion poll)