South Korea is reforming its comprehensive real-estate and property taxes to shift the financial burden toward non-resident owners and ultra-high-value apartments [1].
This policy shift aims to stabilize a volatile housing market by providing relief to those living in their own homes while increasing revenue from speculative investments and luxury holdings [1].
For some primary-residence owners, the changes result in modest savings. A 60-year-old homeowner in Seoul who has lived in an apartment with a 20-billion-won public assessment for 10 years currently pays 5,734,000 KRW in combined taxes [1]. Under the reform, that projected tax is expected to drop to 5,584,000 KRW [1].
However, the reform increases costs for the highest end of the market. An owner-occupied apartment valued at 50 billion won currently incurs a tax of 13,548,000 KRW [1]. By 2028, the projected tax for the same property will rise to 18,794,000 KRW [1].
Non-resident owners face the steepest increases. A 20-billion-won apartment owned by someone who does not reside in the property currently costs 3,705,000 KRW in taxes [1]. This figure is projected to climb to 4,950,000 KRW by 2028 [1].
The most significant impact falls on non-residents holding ultra-luxury assets. For a 50-billion-won apartment owned by a non-resident, the projected tax in 2028 is 28,712,000 KRW [1].
“New reforms lower taxes for primary residents while increasing costs for non-resident owners.”
The South Korean government is attempting to decouple housing as a primary residence from housing as a financial asset. By creating a widening tax gap between owner-occupiers and non-resident investors, the state is using fiscal policy to discourage speculative buying in Seoul's luxury market and incentivize long-term residency.
