Whether you live in it decides a 500 million won gap in the holding tax deduction

Owning the same home now brings a 500 million won difference in the comprehensive real estate tax deduction, depending on whether the owner lives in it. The tax reform bill the government released on 3 August 2026 raises the basic deduction for a single-home household from 1.2 billion won to 1.4 billion won for owners who actually live there, and cuts it to 900 million won for those who do not.

Gov't targets high-value, non-owner-occupied homes in tax overhaul (Korea Times, 2026-08-03)

출처: koreatimes.co.kr

That article carries a number the original post does not. The fair market value ratio applied to regulated-zone and multi-home properties rises from 60 percent to 70 percent in 2027 and 80 percent in 2028. That ratio is the multiplier applied to the official assessed price to produce the amount actually taxed. If the deduction is the door, this ratio is the scale sitting behind it. Leave the door alone, change the scale, and the weight still goes up.

The gap widens at the sale

The change at the point of sale is larger than the change in annual holding tax. Within the 80 percent long-term special deduction on capital gains, the 40 percent earned simply by holding disappears from 2029, leaving only the part earned by actually living in the home. The cap on that deduction also steps down to 2 billion won in 2028 and 1 billion won in 2029. The author works the change through his own example. An apartment bought for 1.2 billion won, held for more than ten years but lived in for only two, and sold for 3.2 billion won would carry capital gains tax of roughly 260 million won under today's rules and roughly 446 million won under the new ones, by his estimate. The long-term deduction shrinks from 600 million won to 200 million won, and the taxable base climbs into the top rate bracket. Those figures rest on his assumptions and have not been confirmed by the government.

Comprehensive real estate tax to be strengthened for homes above 3.2 billion won, non-resident and multi-home owners (Kyunghyang Shinmun English, 2026-08-03)

출처: khan.co.kr

This article draws the rate band more tightly than the original post does. The rate on the 600 million to 1.2 billion won taxable base rises from 1.0 percent to 1.3 percent, and that band begins at a market value of roughly 3.2 billion won. That broadly overlaps the 3.27 billion won line the original post cites.

In Seoul, fewer than half of homes house their owners

The original post attributes this figure to the Seoul Institute. The 44 percent itself is right, but the source is the 2024 Seoul Housing Survey, and the remainder splits into 25.4 percent on jeonse deposit leases and 28.0 percent on monthly rent. When an owner decides to move in, one leased home leaves the rental market with him.

What 480,000 owners decide reaches Seoul's tenants

In 2025, 480,577 people received a comprehensive real estate tax bill, about 3 percent of all homeowners in Korea. That contrast is what this reform really is. The tax touches a narrow group directly, and when that narrow group decides whether to empty a home or fill it, the effect reaches the majority of Seoul households who rent. The 2 to 3.2 billion won owner-occupied home the original post names as the biggest winner is, read the other way, the band where demand to move in is thickest and where rental supply thins out first. The split is whether owners actually move in. If non-resident owners choose to occupy from January 2027, rental supply shrinks and the lease market moves first; if they swallow the tax and keep renting the home out, this reform ends as nothing more than a higher annual holding tax.