South Korea revises real estate tax and supply plans

The South Korean government is facing significant public backlash following the announcement of a real estate tax reform plan. The proposal aims to shift tax benefits from long-term ownership to actual residency, affecting Comprehensive Real Estate Holding Tax and capital gains tax. Critics argue the strict residency requirements do not sufficiently account for unavoidable circumstances such as childcare, remodeling, or parental care.

Analysis suggests the tax gap between single-home owners and multi-home owners will widen under the new system, particularly for high-value properties. While the government intends to promote tax equity by focusing on property value rather than the number of houses, some experts question if the reform will achieve its goals without creating undue burdens on non-resident single-home owners.

In response to growing public discontent, the government and ruling party are working to refine the measures. An additional housing supply plan, targeting approximately 50,000 units in the Seoul metropolitan area using idle land from public institutions and schools, is expected to be announced soon. The government is also considering expanded housing financial support for youth and newlyweds to stabilize the market.