Aftermath of the End of Capital Gains Tax Deferral for Multiple-Home Owners: Locked-Up Listings and Second-Half Housing Prices
As the capital gains tax deferral for multiple-home owners ends, the real estate market is experiencing a severe lock-up in listings, and housing price polarization is expected to worsen after the absorption of tax-saving sales ahead of the property tax assessment date.
In May 2026, with the official end of the capital gains tax heavy taxation deferral for multiple-home owners, a full-fledged 'lock-in' phenomenon of listings is emerging in the real estate market. In particular, after the rapid absorption of urgent tax-saving sales ahead of the June 1 property tax (property tax and comprehensive real estate holding tax) assessment date, the market has entered a severe wait-and-see phase.
Why Did the End of the Capital Gains Tax Deferral Freeze the Market?
With the end of the capital gains tax deferral, the tax burden on multiple-home owners has soared to up to 70-80%. Consequently, rather than selling their homes and paying the hefty taxes, multiple-home owners are choosing strategies like 'holding out' or 'gifting to children'.
- Realization of a Trading Drought: The volume of available properties on the market has plummeted compared to the previous month as sellers give up on selling due to the tax burden.
- Upward Pressure on Jeonse Prices: Buyers delaying purchases are shifting to the rental market, fueling a continuous upward trend in Jeonse (lump-sum deposit rental) prices.
'New Highs' in Seoul, 'Unsold Homes' in Provinces… Deepening Market Polarization
As multiple-home owners focus on holding a single 'blue-chip property' to reduce their tax burden, market polarization is becoming even more pronounced. This is driven by a strong tendency to first dispose of properties in the outskirts or provincial areas and hold onto homes in core areas of Seoul.
As a result, while record-high transactions occasionally break out in core areas like the three Gangnam districts and 'Ma-Yong-Seong' (Mapo, Yongsan, Seongdong) in Seoul, the provincial real estate market is suffering from a backlog of unsold homes, creating an extreme decoupling trend.
FAQ: Key Questions for the Second-Half Real Estate Market
Q1. When is a good time to buy a home after the end of the capital gains tax deferral?
Given the sharp decline in listings creating a seller's market, it is advantageous to take a selective approach. Rather than chasing unreasonable purchases, it is better to wait for potential interest rate cuts by the Bank of Korea in the second half of the year and monitor signals of further real estate deregulation (such as mandatory residency requirements) while looking for urgent sales.
Q2. What is the outlook for the Jeonse market in the second half of the year?
As demand surges from those deferring purchases and choosing to live in Jeonse instead, the upward trend in Jeonse prices is expected to continue for the time being. Tenants whose renewal contracts are expiring must proactively establish their housing plans.