---
title: "Key Takeaways from the National Real Estate Policy Debate: Holding Tax, Capital Gains Tax, and Supply"
locale: en
category: news
category_name: "News"
translation_status: reviewed
license: cc_by
author: "Injoys Editorial Team"
source_url: https://injoys.com/en/articles/korea-housing-policy-tax-supply-debate
published_at: 2026-07-27T18:16:17+09:00
---

# Key Takeaways from the National Real Estate Policy Debate: Holding Tax, Capital Gains Tax, and Supply

> The National Real Estate Policy Debate covered higher holding taxes on ultra-expensive and non-owner-occupied homes, adjustments to capital gains tax relief for single-home owners, a sales off-ramp for multi-home owners, and shorter public housing site development timelines. As no tax laws or implementation plans have been finalized, subsequent tax reform proposals and legislative amendments should be reviewed.

## Key Points

- A differentiated holding tax plan was proposed that would use typical single-home ownership as the baseline, provide relief for owner-occupied, lower-income, and regional homes, and impose greater burdens on ultra-expensive, multi-home, and non-owner-occupied properties.
- A proposal to limit either the number of times single-home owners can claim capital gains tax relief or the cumulative amount of relief was mentioned as an option under consideration.
- To reduce the withholding of properties from the market due to higher holding taxes, a temporary capital gains tax off-ramp for multi-home owners who reduce the number of homes they own was also discussed.
- The supply strategy emphasized shortening the compensation, approval, and construction commencement processes for existing public housing sites, including third-generation new towns, rather than expanding new housing sites.
- The tax rates, price thresholds, loan restrictions, and supply proposals discussed at the debate are not finalized policies, and legislation and implementation regulations are still pending.

At the National Real Estate Policy Debate, a wide range of policy directions were discussed, from taxes imposed while owning a home and capital gains tax at the time of sale to the pace of public housing site development, jeonse loans, and public rental housing. The key proposal is to distinguish more precisely between ordinary homes used as primary residences and ultra-expensive, multiple-home, and non-primary-residence properties.

However, the remarks made at the debate were largely in the nature of policy directions or instructions for review. Details such as the threshold for ultra-expensive homes, tax rates, deduction limits, and effective dates will be finalized only after the tax reform plan is announced and legislation passes the National Assembly.

## Policies Discussed at a Glance

| Area | Direction Discussed | Expected Effect | Key Issues |
|---|---|---|---|
| Property holding tax | Reduce taxes on primary residences and homes for ordinary households and in regional areas, while gradually increasing taxes on ultra-expensive, multiple-home, and non-primary-residence properties | Discourage speculative ownership and improve tax fairness | Ultra-expensive threshold, determination of primary residence, possibility of sharp tax increases |
| Capital gains tax for single-home owners | Consider limits on the number of deductions or the cumulative deduction amount | Limit excessive benefits from repeatedly trading up to expensive homes | Criteria for distinguishing genuine residential moves from speculative transactions |
| Capital gains tax for multiple-home owners | Consider a temporary exit route that lowers the burden when reducing the number of homes owned | Ease the withholding of properties from the market and increase listings | Fairness compared with previous deferrals, effectiveness in encouraging sales |
| Housing supply | Shorten compensation, permitting, and construction commencement periods for existing public housing sites rather than developing new sites | Bring forward the availability of homes for occupancy | Construction costs, consultations with residents, delays in infrastructure and compensation |
| Reconstruction and redevelopment | Take a cautious approach to across-the-board deregulation, including higher floor area ratios | Prevent price instability driven by development expectations | Balance between expanding long-term supply and short-term price increases |
| Jeonse loans | Reconsider support for owners of non-primary-residence properties while supporting young people and newlyweds | Curb credit supply that stimulates housing prices | Potential harm to genuine end users and contraction of the rental market |
| Public rental housing | Supply medium-sized units near transit stations to support long-term residence for the middle class | Improve the residential quality of public rental housing and expand its demand base | Land costs, funding, supply volume, and securing suitable locations |

## How Property Holding Taxes Could Change

### Establishing an Ordinary Single Home as the Basic Benchmark

The debate proposed first setting a basic property holding tax level for an “ordinary single home,” then differentiating the burden according to the home’s price, number, purpose of use, and region.

The structure discussed is as follows.

- Apply the basic burden to an ordinary single home used as a primary residence.
- Provide tax reductions for homes for ordinary households and homes in regional areas.
- Gradually add to the burden on ultra-expensive homes, multiple homes, and non-primary-residence properties held for speculative purposes.
- Reflect not only the number of homes but also asset value and actual use more actively in the tax criteria.

The debate materials noted speculation that a market value of around KRW 4 billion–5 billion could be considered as the threshold for ultra-expensive homes. However, this is not a finalized taxation threshold. In the actual system, the homes covered and the tax burden will vary significantly depending on whether the standard is market value, officially assessed value, or taxable value.

### Differences from the Current Property Holding Tax System

South Korea’s property holding taxes consist of local property tax and the national comprehensive real estate holding tax. The comprehensive real estate holding tax reflects factors including the total officially assessed value, basic deductions, whether the taxpayer owns one home per household, the number of homes, and the form of ownership.

The issue raised at the debate was that distinctions based mainly on the number of homes do not adequately reflect asset value and the actual purpose of ownership. It was pointed out that someone who owns several low- to mid-priced homes in regional areas may bear a heavier tax burden than someone who owns one ultra-expensive home in Seoul. If a new differentiated system is introduced, its key feature is likely to be combining the number of homes with price, primary-residence status, and regional characteristics.

## Proposed Adjustments to Capital Gains Tax Deductions for Single-Home Owners

### Limits on the Number and Cumulative Amount of Deductions

At the debate, it was suggested that the system should be adjusted to address single-home owners who repeatedly receive tax exemptions or deductions by trading up to expensive homes several times. Three main approaches were mentioned for consideration.

1. Limit the number of deductions over a lifetime or during a specified period.
2. Provide a large benefit for the first sale and reduce the benefit for subsequent transactions.
3. Cap the cumulative deduction amount across multiple transactions.

These approaches are intended to distinguish households that have lived in one home for a long period from those that repeatedly replace expensive homes. However, exception criteria would be needed because genuine end users who move frequently due to employment, changes in family composition, or caregiving responsibilities could be disadvantaged.

### Basic Structure of the Current One-Home-Per-Household Exemption

Under the current Income Tax Act, the capital gains tax exemption for one home per household generally requires statutory conditions, including the holding period, to be met. For expensive homes with a sale price exceeding KRW 1.2 billion, the entire capital gain is not automatically exempt; the portion of the capital gain corresponding to the amount exceeding KRW 1.2 billion may be taxable.

Additional residency requirements may apply depending on the acquisition date and region, while separate special provisions may apply to temporary ownership of two homes, inherited homes, or households combined through marriage. Therefore, it should not be assumed that all single-home transactions are exempt solely based on “two years of ownership.”

## Why Multiple-Home Owners Need an Exit Route for Sales

If property holding taxes are raised while the capital gains tax burden also remains high, multiple-home owners may postpone sales to avoid taxes. This is known as “property lock-in.” When fewer properties are listed, the number of homes available for transaction declines, and sale prices or rents may rise in some areas.

According to the materials provided, these concerns were raised after the deferral of heavier capital gains taxation for multiple-home owners ended on May 9, 2026. Accordingly, the following temporary exit routes may be considered alongside stronger property holding taxes.

- Reduce part of the heavier tax rate for a specified period.
- Ease the burden only when the number of homes owned is actually reduced.
- Set a disposal deadline to encourage homes to be listed in the short term.
- Distinguish between speculative short-term ownership and long-term ownership.

Simply repeating a deferral at the previous level would create a fairness issue for those who disposed of their homes in advance. Therefore, eligibility for deductions, the applicable period, and conditions requiring a reduction in the number of homes are expected to be key criteria in a follow-up plan.

## Supply Policy Focuses on Shortening Timelines

### Shortening Project Timelines for Existing Public Housing Sites

The debate emphasized the practical difficulty of finding additional large-scale new housing sites in the Seoul metropolitan area. As an alternative, shortening project timelines for already designated public housing sites, including third-generation new towns, was proposed.

Public housing sites generally proceed through district designation, land compensation, permits and approvals, infrastructure installation, construction commencement, and occupancy. Processing each procedure sequentially can lengthen the project timeline, so conducting some procedures in parallel or streamlining overlapping regulations may be considered.

As seen in the Goyang Changneung District, delays in land compensation and rising construction costs are major variables that can postpone construction commencement. Even if administrative procedures are shortened, it will be difficult to substantially bring forward actual occupancy unless issues involving compensation negotiations, infrastructure such as transportation networks and schools, construction costs, and project feasibility are resolved.

### Caution on Easing Reconstruction and Redevelopment Rules

Higher floor area ratios and deregulation of urban renewal projects could increase the number of urban homes over the long term. However, in the early stages of a project, development expectations may be reflected first, driving up the prices of existing homes and land. The debate presented a cautious position that both the supply expansion effect and the risk of short-term price increases must be considered.

## Direction for Jeonse Loans and Public Rental Housing

### Distinguishing Home Ownership from Genuine Demand in Jeonse Loans

The debate suggested reconsidering whether loans are necessary for people who already own a home but live in another home under a jeonse lease. This was based on the view that although jeonse loans support housing stability for tenants, they can increase available funds and stimulate jeonse deposits and home sale prices.

However, jeonse loan limits and eligibility may vary depending on the guarantor institution, financial company, and the price and location of the home owned. A plan to prohibit jeonse loans in principle for single-home owners who do not reside in their owned home is also not a finalized rule. Maintaining or strengthening support for groups requiring policy protection, such as young people, newlyweds, and ordinary households without homes, was also mentioned.

### Plan to Expand Medium-Sized Public Rental Housing

A plan was also reaffirmed to move away from supplying mainly small public rental homes and instead provide medium-sized homes with larger exclusive floor areas near transit stations. The aim is to provide quality and locations suitable for long-term residence by families and the middle class.

“25 pyeong and 30 pyeong” are generally used to refer to gross floor area, but the exclusive floor area may differ by project. The actual supply scale, rent, occupancy eligibility, and residence period must be finalized in each individual project plan.

## Potential Impact on the Market

### Expected Positive Effects

- Higher ownership costs for ultra-expensive and non-primary-residence properties could reduce speculative demand.
- Reflecting asset value and purpose of use rather than the number of homes alone could improve tax fairness.
- If conditional capital gains tax relief is implemented, the number of listings could increase in the short term.
- If shorter public housing site procedures lead to actual construction commencement and occupancy, they could ease medium-term supply concerns.
- Medium-sized public rental housing could broaden long-term housing options for families and the middle class.

### Risks That Must Also Be Considered

- The tax burden could be passed on through rents.
- Property lock-in could worsen if the capital gains tax burden is not sufficiently reduced.
- If deductions repeatedly end and are reintroduced, market participants may wait for the next deferral.
- If determining primary-residence status is complicated, administrative costs and tax disputes could increase.
- Shortening project procedures must not weaken safety, environmental protections, or the collection of residents’ opinions.

## Items to Check in the Final Plan

The following points should be checked in the tax reform plan and legislative amendments announced after the debate.

1. Whether ultra-expensive homes are determined based on market value or officially assessed value.
2. What period and evidence are used to distinguish primary residences from non-primary residences.
3. What price and regional criteria apply to tax reductions for homes in regional areas and homes for ordinary households.
4. Whether restrictions on capital gains tax deductions for single-home owners are based on the number of deductions or the cumulative amount.
5. Whether transitional measures and a phased increase period are provided to existing owners.
6. The duration of capital gains tax relief for multiple-home owners and the conditions for reducing the number of homes.
7. Who is subject to jeonse loan restrictions and the scope of exceptions for young people and newlyweds.
8. Whether the target for shortening public housing site timelines is measured by presale, construction commencement, or occupancy.

## Conclusion

The policy direction presented at this debate focuses on differentiating the burden by combining primary-residence status, home price, number of homes, and region, rather than uniformly raising taxes on all homes. Because strengthening property holding taxes alone could cause property lock-in and rent increases, the proposed structure seeks to simultaneously provide conditional sales exit routes for multiple-home owners and shorten housing supply timelines.

However, remarks made at the debate alone do not change tax liabilities or loan eligibility. Actual applicability must be determined based on the government’s tax reform plan, laws passed by the National Assembly, enforcement decrees, and detailed guidelines issued by financial institutions.

## FAQ

### Was an increase in property holding taxes finalized at the forum?
No. A policy direction was proposed to increase the burden on ultra-expensive, multiple-home, and non-owner-occupied homes, but the tax rates, taxation criteria, and implementation date have not been finalized. The actual tax burden will change only after the government's tax reform proposal and legislation by the National Assembly.

### Will property holding taxes rise for all single-home owners?
The proposed direction is not to raise taxes uniformly for all single-home owners. A differentiated approach was discussed, using a typical owner-occupied single home as the baseline, providing tax reductions for homes owned by lower-income households and homes in non-metropolitan areas, and imposing additional burdens on ultra-expensive or non-owner-occupied homes.

### Has a market price of 4 billion to 5 billion won been finalized as the threshold for an ultra-expensive home?
No. It was only mentioned as a possibility for consideration in the forum materials provided. The actual system would also need to determine whether to use market prices or officially assessed prices and how to handle jointly owned homes and single-home households.

### Will the capital gains tax exemption for single-home owners be abolished?
A complete abolition has not been decided. Measures to limit the number of times tax relief can be claimed or the cumulative amount of relief for repeated moves between expensive homes were proposed for consideration. How to protect long-term owner-occupants and those who must move due to unavoidable circumstances is a key issue.

### Is capital gains tax always exempt if a home is held for two years?
No. Multiple conditions must be met, including whether it is the only home owned by the household, when it was acquired, the holding and occupancy requirements, and the sale price. For an expensive home with a sale price exceeding 1.2 billion won, the portion of the capital gain corresponding to the amount above the threshold may be taxed, and exceptions and special provisions also exist.

### Will capital gains tax for multiple-home owners once again be fully suspended?
A full suspension identical to the previous one has not been finalized. A conditional exit strategy was discussed, under which tax rates would be partially reduced for a certain period or the burden would be eased only when the number of homes owned is actually reduced.

### Will all jeonse loans for single-home owners be prohibited?
No. Only a policy direction to reconsider the need to provide jeonse loan support to people who own a home in which they do not reside was proposed; no specific prohibition has been finalized. Loan eligibility and limits vary by guarantor and financial product, and the need to support young people and newlyweds was also emphasized.

### What are the key measures for increasing the housing supply?
Rather than finding large-scale new housing sites, greater emphasis was placed on shortening project timelines by carrying out land compensation, permitting and approval, and construction commencement procedures concurrently on existing public housing sites, including third-generation new towns. However, actual move-in dates can be brought forward only if construction costs and infrastructure issues are also resolved.

### Will floor area ratios for reconstruction and redevelopment projects be relaxed soon?
A blanket relaxation has not been finalized. A cautious approach was proposed because, although higher floor area ratios could increase long-term supply, development expectations could drive up housing prices in the short term.

## Sources

- [National Law Information Center Income Tax Act](https://www.law.go.kr/법령/소득세법)
- [National Law Information Center Comprehensive Real Estate Holding Tax Act](https://www.law.go.kr/법령/종합부동산세법)
- [National Law Information Center Local Tax Act](https://www.law.go.kr/법령/지방세법)

## Images

![People discussing housing policy before a scale holding homes, buildings, and coins](https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MzQ3NywicHVyIjoiYmxvYl9pZCJ9fQ==--72ce8c49c0699f1c318444db1a52be51a07f69c1/ai-7178d8ef.webp)
![Housing policy infographic with coin stacks, home moves, apartment construction, documents and a stamp](https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MzQ4NCwicHVyIjoiYmxvYl9pZCJ9fQ==--1d814e0ad5e6ebb03f9b4d3e4d0ead80ed947987/ai-5250d273.webp)