Tax overhaul would preserve some rental-property capital gains benefits after transfer notices while officials say deemed-residency exceptions for single homeowners may be broadened during decree revisions.
South Korea is refining a broader real estate tax overhaul by preserving capital gains tax benefits for some registered rental business operators affected by redevelopment and reconstruction projects and by signaling flexibility on a proposed three-year deemed-residency rule for single homeowners who relocate for unavoidable reasons. The government said rental operators whose properties remain under a mandatory rental period as of January 1 next year and are newly designated as regulated areas or are undergoing redevelopment or reconstruction can keep benefits for one year from the latest of the rental-period expiration date, the designation announcement date, or the transfer notice date, addressing cases where cooperative membership rights transfers are heavily restricted in speculative overheating districts such as Seoul. At the same time, Deputy Prime Minister and Finance Minister Koo Yun-cheol said the three-year deemed-residency period was set as a baseline and could be reviewed further during enforcement decree revisions if reasons for non-occupancy are judged reasonable. The wider reform still tightens support over time: current rental-business benefits remain through next year, the preferential long-term holding special deduction falls from 50% to 30% in 2028, multi-homeowners face a 50% heavy capital gains tax in 2028, and from 2029 the deduction is eliminated and heavy taxation fully applies. The package also partially counts some reconstruction construction periods toward residence time, narrows benefits under the win-win rental housing program, expands comprehensive real estate tax payment deferrals for some elderly single-homeowner households, and includes planned targeted lending support for young people, newlyweds and homeless ordinary citizens.