South Korea will phase out a special capital gains tax break for basic pension recipients who sell real estate and place the proceeds into a pension account, with the measure set to sunset on December 31, 2027 under the 2026 tax reform plan released by the Ministry of Economy and Finance on the 12th. The program, introduced in a 2024 tax law revision, grants a 10% tax credit on deposited sale proceeds up to 100 million won (approximately $70,838) for eligible households, but officials said it is being ended because usage has been low and the policy has not been effective. The government said the scheme was meant to help older people shift assets away from real estate and into annuities for steadier cash flow, but noted that homes with actual transaction prices of 1.2 billion won (approximately $850,051) or more, which are subject to capital gains tax, were rare among basic pension recipients. The reform package also ends or converts other tax breaks into fiscal spending, including credits for corporate sports and esports teams, VAT (value-added tax) exemptions on heating for permanent rental housing, and indirect tax support tied to island transport. Separate controversy remains over a planned reduction in the preferential VAT credit on business owners' credit card sales, though the government said more than 93% of eligible businesses fall within the lower 5 million won (approximately $3,542) basic credit limit and would see virtually no substantive impact.