South Korea reinstated a capital gains tax surcharge for owners of multiple residential properties effective May 10, 2026 [1].
The policy aims to curb speculative real estate investment and increase government tax revenue by removing long-term holding deductions for these properties [1].
The new regulations apply specifically to homes located in designated “adjusted target areas” [1]. Under the reinstated rules, basic capital gains tax rates, which range from six% to 45% [1], are now subject to additional surcharges based on the number of properties owned.
Owners of two residential properties face a surcharge of 20 percentage points [1]. For those owning three or more homes, the surcharge increases to 30 percentage points [1].
These changes significantly increase the financial burden on investors. In one example involving a property sale in Banpo Xi, the tax on a two-home owner rose from 1.3 billion won to 2.4 billion won [2]. For owners of three or more properties, the total tax burden may increase by more than double in some cases [1].
"Two-home owners are added 20%p, and those with three or more homes are added 30%p respectively," said YTN reporter Cha Yu-jeong [1].
The move signals a return to aggressive taxation to stabilize the housing market. By targeting the most prolific owners, the government seeks to discourage the accumulation of residential assets used primarily for profit, rather than habitation [1].
“Tax burden can more than double for owners of three or more homes”
The reinstatement of these surcharges represents a pivot back toward restrictive real estate policies to cool an overheated market. By specifically targeting 'adjusted target areas' and removing long-term holding deductions, the government is attempting to force speculative holders to liquidate assets, potentially increasing the supply of available housing and slowing price inflation in high-demand urban centers.
