South Korea will apply multi-home tax criteria to couples who jointly own a single residence starting next year [1].
The policy shift targets a perceived loophole in the comprehensive real-estate tax system. By reducing basic deductions for certain owners, the government aims to increase tax revenue and ensure a more equitable distribution of the tax burden.
Under the new rules, the basic deduction for non-resident joint-ownership single-home owners will be reduced to 400 million won per person [1]. This results in a total basic deduction of 800 million won for the couple [1].
This creates a sharp divide between those who live in their homes and those who do not. For joint-ownership single-home owners who actually reside in the property, the deduction remains at 900 million won per person [1]. This allows resident couples to receive a total deduction of 1.8 billion won [1].
The difference in tax treatment between resident and non-resident joint owners amounts to 1 billion won [1]. The government is adjusting the fair-market-value ratio and basic deduction amounts to treat non-resident joint owners similarly to multi-home owners [3].
Despite the stricter criteria, some relief remains available. A government official said that taxpayers are not exclusively taxed as multi-home owners and can still choose a one-home special exemption [1].
This adjustment specifically impacts those using joint ownership as a strategy to lower tax liabilities without residing in the property. The government's move signals a tightening of real estate tax loopholes that previously benefited non-resident owners through joint titling [3].
“The basic deduction for non-resident joint-ownership single-home owners will be reduced to 400 million won per person.”
This policy change indicates a strategic shift by the South Korean government to discourage the use of joint ownership as a tax avoidance tool for non-resident property owners. By creating a 1 billion won gap in deductions between resident and non-resident owners, the state is prioritizing owner-occupiers while increasing the financial burden on those who hold property as an investment or secondary asset.
