Real Estate Tax Reform Discussions Accelerate: Market Impact of Raising Tax Thresholds for Ultra-High-Priced Homes

The government has fully launched discussions on tax reform to stabilize the real estate market and improve tax equity. A revised tax bill that raises the tax threshold for ultra-high-priced homes and eases the punitive holding tax burden on multiple-home owners is strongly being considered, emerging as a key variable for the real estate market in the second half of the year.

Will Raising the Tax Threshold for Ultra-High-Priced Homes Stabilize the Market?

With apartment sales and Jeonse (lump-sum deposit rental) prices surging simultaneously, particularly in Seoul and the metropolitan area, concerns over housing instability are growing. In response, the government has decided to overhaul the tax system, judging that the current real estate tax framework induces an unnecessary concentration of demand for a 'single premium home.' The core of the reform is to significantly raise the comprehensive real estate holding tax threshold for ultra-high-priced homes to reflect current market realities.

Additionally, discussions are actively underway to ease the heavy tax rates applied to multiple-home owners, thereby reducing the tax burden on private landlords who form a major pillar of housing supply. This reflects the government's intention to prevent the side effect of excessive holding taxes being passed on to tenants in the form of rent hikes and to encourage multiple-home owners to put their properties on the market, thereby easing supply constraints.

Key FAQ on Real Estate Tax Reform

Q1. What is the biggest change if the tax threshold for ultra-high-priced homes is raised?

If the tax threshold is raised, a large number of single-home owners residing in key metropolitan areas for actual living purposes are expected to be exempt from the comprehensive real estate holding tax. This is expected to relieve the excessive tax burden on the middle class and resolve the side effect of having to sell homes just to pay taxes.

Q2. Will easing the holding tax for multiple-home owners help calm the soaring Jeonse prices?

Yes, easing the tax burden on multiple-home owners effectively blocks the 'shifting of taxes to tenants.' When the holding tax burden decreases, multiple-home owners have less incentive to unreasonably raise Jeonse deposits or convert to semi-Jeonse, ultimately contributing to the stabilization of Jeonse supply.

Q3. When will the specific tax reform bill be announced?

The Ministry of Economy and Finance, along with the Presidential Committee of National Cohesion, is currently gathering on-site opinions through nationwide touring debates. The final real estate tax reform plan will be included and unveiled in the '2026 Tax Revision Bill' scheduled to be announced at the end of this month (late July).