The South Korean government is reviewing a revision to the comprehensive real-estate holding tax for non-resident owners of a single home [1].
The proposed changes aim to address public concerns and criticisms from the Democratic Party regarding the fairness of recent tax increases. By adjusting the deduction limits and residence criteria, the government seeks to balance tax revenue with the financial realities of non-resident citizens.
Vice Prime Minister and Minister of Economy and Finance 구윤철 said the government would seek a more rational plan by listening to various voices of the people [1].
A central point of the review is the basic deduction for non-resident single-home owners. This deduction had been reduced to 900 million won [1], but the government is now considering restoring it to 1.2 billion won [2].
Beyond the deduction amount, the government is examining how it recognizes actual residence for those living outside the country. The maximum period for recognizing actual residence for non-residents could be extended up to three years [1]. However, the minimum prior-residence requirement is expected to remain at one year [3].
These adjustments follow a period of tension over the tax burden placed on citizens who maintain a single home in South Korea while residing abroad. The administration is attempting to broaden the definition of actual residence to ensure that those with legitimate ties to the country are not unfairly penalized.
A draft of the revised plan is expected to be finalized by the end of this week [1].
“The government is considering restoring the basic deduction to 1.2 billion won.”
This policy shift indicates a tactical retreat by the South Korean government in response to political pressure and public backlash. By restoring the 1.2 billion won deduction and easing residence requirements, the state is acknowledging that strict tax hikes on non-residents may be perceived as punitive rather than corrective. This move suggests a broader effort to maintain the loyalty and investment of the overseas Korean diaspora.
