South Korea to raise property tax on ultra‑high‑value single homes

In 2024 South Korea’s comprehensive real estate tax (CET) deductions for ultra‑high‑price homes—those with a taxable value over 20 billion won—reached a record 461 billion won, the largest in four years. The bulk of the benefit went to owners of expensive apartments in Seoul, especially the Gang‑nam area, where the tax deduction system has allowed some sellers to reduce capital‑gain tax by more than 200 billion won.

The National Tax Service chief Im Kwang‑hyun warned that the long‑term holding special deduction, which can cut up to 80 % of capital‑gain tax for holdings over five years or owners over 60, is regressive and fuels the “one smart house” incentive. He noted that 87.9 % of the total CET deduction was applied to Seoul properties and that 69.6 % of the top‑100 deductions were concentrated in Gang‑nam and Yongsan districts.

The government, led by Prime Minister Han Seong‑suk, is preparing a tax‑reform package slated for early February. The plan includes setting new price thresholds (around 30‑50 billion won) for higher‑rate brackets, moving the tax base from the number of homes to their market value, and reducing or removing the generous long‑term holding deductions. These changes aim to increase the tax burden on ultra‑high‑value single‑family homes and curb the current incentive structure.