The South Korean government will maintain long-term home ownership special deductions and proceed with planned housing supplies in the capital region [1].
This decision aims to stabilize the real estate market by protecting primary residents while discouraging speculative holding through targeted tax benefits. By upholding these commitments, the administration seeks to prevent market volatility and ensure the delivery of promised housing infrastructure.
Kim Yong-beom, the Chief of Staff for Policy at the Blue House, said the long-term ownership special deductions will naturally be maintained [1]. The government intends to ensure that there are no issues regarding the protection of individuals who own a single home for primary residence [1].
These tax deductions are critical for homeowners who have held properties over extended periods, with some deduction rates for residence and ownership reaching 40% [1]. The policy is designed to shield long-term residents from sudden tax burdens that could arise from rising property values.
Regarding housing availability, the government is moving forward with a plan announced earlier this year. A Blue House spokesperson said the government will proceed as announced with the supply of 60,000 housing units in the capital region, including Seoul, Incheon, and Gyeonggi province [1].
The 60,000-unit target [1] was first promised in January. The administration is emphasizing its commitment to this timeline to address the housing shortage in the most densely populated areas of the country. This effort is part of a broader strategy to balance supply and demand in the metropolitan area, a region that often sees the highest levels of price speculation.
President Lee Jae-myung's administration is balancing the need for strict regulation of speculators with the necessity of providing relief to legitimate homeowners [1]. The continued application of the special deduction serves as a buffer for the middle class against aggressive tax hikes.
“"The long-term ownership special deductions will naturally be maintained."”
By maintaining the long-term ownership special deduction and adhering to the 60,000-unit supply goal, the South Korean government is attempting to signal stability to the market. This approach aims to prevent a mass sell-off of properties by primary residents while simultaneously tackling the housing shortage in the Seoul metropolitan area to curb speculative price hikes.
