August 3 Real Estate Tax Reform: How to Avoid the Comprehensive Real Estate Tax Bomb for Joint Ownership?
The August 3, 2026 real estate tax reform has sparked controversy as tax benefits for joint home ownership are drastically reduced based on 'actual residence' status.
[EconoKey AI Flash News] The real estate tax reform plan announced by the government on August 3, 2026, is expected to significantly change the tax burden for married couples with joint home ownership. The core criteria for the comprehensive real estate holding tax and capital gains tax have shifted from the "number of homes owned" to "actual residence" and "home value", drastically reducing tax benefits for non-resident joint owners.
Key Point of the Aug 3 Tax Reform: Shift to Residence-Based Benefits
The most prominent feature of this reform is that tax benefits are now tied to actual residence. For resident joint owners of a single home, the combined basic deduction of 1.8 billion won is maintained. However, for non-resident joint owners, the deduction is slashed by more than half to a combined 800 million won. Furthermore, the existing special deduction for long-term ownership has been reorganized into a 'long-term residence deduction', clarifying the policy of imposing punitive taxes on ultra-high-priced homes and multi-home owners. In online communities, backlash is intensifying, with many arguing that the policy "kicks away the ladder for younger generations and actual residents."
FAQ: How Should Joint Owners Respond to the Tax Changes?
Q1. We are non-resident joint owners. How much will our taxes increase?
For non-resident joint owners, the basic deduction is drastically reduced to 400 million won per person (800 million won total). Even if you opt for the single-home owner special exception, non-residents can only deduct up to 900 million won. Depending on the home's value, the tax burden could surge from millions to tens of millions of won compared to the previous system.
Q2. Is it true that joint ownership will be treated as "multi-home ownership" starting in 2028?
Yes, essentially. Under the comprehensive real estate tax law, joint ownership by a married couple is considered as two separate owners. The government plans to raise the fair market value ratio for comprehensive real estate tax to 80% for owners other than single-home owners starting in 2028. Consequently, joint owners who do not receive the single-home owner exception will be subject to the same high tax rates as multi-home owners.
Q3. Is it advantageous to change the ownership name right now?
Sole ownership is not always unconditionally advantageous. The pros and cons depend on specific home price ranges, the couple's age, and the holding period. It is highly recommended to thoroughly compare the costs of changing ownership (such as acquisition tax) against future tax increases, and consult with a tax expert to choose the most advantageous taxation method.