South Korea shifts property tax to target speculators

The South Korean government unveiled a sweeping overhaul of its real estate tax system on August 3, 2026, shifting the nation's property tax structure to emphasize actual residence over ownership in a bid to curb speculation and improve tax fairness. Approved during a high-level tax development committee meeting, the 2026 tax reform plan represents the most significant change to the system in four years and will be phased in through 2029.

At the core of the reform is a restructuring of the comprehensive real estate holding tax. The system will pivot from applying higher rates based on the number of homes owned to a structure tied primarily to a property's taxable value, regardless of ownership count. A key feature is the creation of a significant tax gap between resident and non-resident owners of single homes. The basic deduction for an owner-occupant will increase from 1.2 billion won to 1.4 billion won, while for a non-resident single-home owner, it will drop sharply to 900 million won. Officials estimate this will exempt owner-occupied homes with market values of about 2 billion won or less from the holding tax.

Tax rates themselves are set to rise, with the highest rate for...