South Korea Considers Value-Based Real Estate Tax Shift

South Korean government officials and tax experts are proposing a shift in the comprehensive real-estate tax from a per-house count to a property-value basis.

The move seeks to stimulate the housing market by encouraging owners of multiple properties to sell. By easing capital-gains taxes and changing how the comprehensive real-estate tax is calculated, the government aims to increase the supply of available listings, particularly in the Seoul metropolitan area.

Under the current system, the number of homes owned significantly impacts the tax burden. For example, a single house with an official price of 1.5 billion won carries a tax of 900,000 won ^[1]. However, owning two such houses increases that tax to 1,920,000 won ^[1]. This jump represents more than double the cost for a second property of equal value.

Experts, including Ham Young-jin of the Woori Bank Real Estate Research Lab, said that the taxation standard should be based on value rather than the quantity of homes owned. This approach would shift the primary tax burden toward ultra-high-value properties regardless of how many units a person owns.

In addition to the comprehensive tax changes, officials are discussing the relaxation of capital-gains taxes for those holding multiple properties. The goal is to remove the financial barriers that prevent owners from selling their assets, a move intended to lower prices through increased inventory.

“Experts say the comprehensive real-estate tax assessment standard should be changed to a value basis, not the number of houses,” a YTN News report said.