The Return of the “Solid One Home”: Non-Resident and Over 4 Billion Won Super-Luxury Assets Face Heavier Tax Burden [2026 Tax Reform]

Comprehensive Real Estate Tax Reform:
14 Billion Won Deduction for Primary Residence,
9 Billion Won for Non-Resident Owners

Fair Market Value Ratio Up to 80%...
Tax Burden Cap Raised to 200%

If Not Living in a 4 Billion Won Apartmen

Starting next year, individuals who own a single home with a government-assessed value exceeding 1.4 billion won (market price of around 2 billion won) will have to pay additional comprehensive real estate tax unless they actually live in that home. This essentially means that even single-home owners will face a penalty if they do not occupy their property. On the other hand, from next year, single-home owners whose property has a government-assessed value of 1.4 billion won or less will be exempt from comprehensive real estate tax. Currently, anyone with a government-assessed value over 1.2 billion won is subject to the same tax standard, regardless of whether they live there or not. Last year, 480,577 people were affected by the previous criteria, all of whom will fall under the scope of the revised tax reform plan.

A panoramic view of apartments in the Gangnam area as seen from the Lotte World Tower Sky Observatory in Songpa-gu, Seoul. Photo by Dongju Yoon

According to the 2026 tax reform plan announced by the Ministry of Economy and Finance on the 3rd, the government will raise the threshold at which single-home owners become liable for comprehensive real estate tax from 1.2 billion won to 1.4 billion won in government-assessed value. If the value exceeds 1.4 billion won, the tax calculation will differ depending on residency. If the owner lives in the home, 1.4 billion won is deducted from the assessed value; if not, only 900 million won is deducted.

When calculating the comprehensive real estate tax, the tax base is determined by subtracting the basic deduction from the government-assessed value of the home and then multiplying by the fair market rate. The resulting tax base is subject to progressive tax rates depending on each segment, and the final amount payable is determined after applying tax credits and limits on maximum tax increases.

In this revision, the government has simultaneously adjusted the three core variables in the comprehensive real estate tax formula: the basic deduction, the fair market rate, and the tax rates. In addition, the cap on tax increase—which was originally set at 150% of the previous year’s assessed tax—has been raised to 200%, so that homeowners will bear the full extent of any tax increase.

The fair market rate, currently set at 60%, will rise to 70% in 2027 and to 80% in 2028. Next year, this will be applied uniformly regardless of the number of homes or their locations; from 2028, it will differ based on the types of homes owned. Even if a homeowner has a property in a regulated area, if they only own one home, the fair market rate of 70% will still apply in 2028. However, anyone owning three or more homes, or two homes with at least one in a regulated area, will be subject to the 80% fair market rate, regardless of location.

Abolition of tiered tax rates by home count in 2028…Max rate for 1–2 homes also set to 5%

From 2028, progressive tax rates by tax base will be unified by property value, regardless of the number of homes owned. Currently, those who own three or more homes face higher tax rates than those with just one or two, even when the property values are the same. After the reform, all high-value properties will be subject to the same tax rates currently applied to owners of three or more homes, regardless of the number of homes owned. Consequently, for owners of one or two homes with a tax base between 2.5 billion and 5 billion won, the tax rate will increase from the current 1.5% to 2% in 2027 and 3% in 2028. For tax bases exceeding 5 billion and up to 9.4 billion won, the rate will rise from 2% to 4%, and for those above 9.4 billion won, from 2.7% to 5%.

Judging by the tax rate table alone, the main target for greater tax burdens on 'ultra high-end homes' is in the 2.5–5 billion won tax base bracket, where the rate jumps by 1.5 percentage points. In practice, however, the tangible tax burden starts to rise for homes with a market price in the 4 billion won range. This is because single-home owners who do not reside in their property are pushed into the 2% tax rate bracket due to the reduced basic deduction and higher fair market rate, and become ineligible for long-term ownership tax credits. Deputy Director Manhee Cho of the Ministry of Economy and Finance stated during a briefing on the tax reform plan, "Once the market price exceeds the 4 to 5 billion won range, the tax burden rises significantly."

The government has also decided to increase the tax rate for tax bases between 600 million and 1.2 billion won—previously subject to a flat rate regardless of the number of homes owned—from 1% to 1.3% in 2027. This change helps mitigate the risk of tax cuts on high-value homes resulting from the expanded deduction for single home residents and narrows the rate gap with the next-highest bracket. This range corresponds to occupied single homes with market prices roughly between 3.27 billion and 4.5 billion won—typical of expensive apartments in Gangnam and along the Han River, often used for jeonse or monthly rental.

In effect, this tax hike will have a significant impact on single-home owners with properties worth 3 to 4 billion won who rent them out rather than live in them. Residents occupying their only homes will benefit from the larger 1.4 billion won deduction, bringing their tax base below 600 million won and qualifying for the lowest rate (0.7%). In contrast, non-residents will have their deduction squeezed to 900 million won, pushing them into the higher 1.3% tax rate bracket (tax base of 600 million to 1.2 billion won) as a result of the changes.

Cap on combined senior citizen and long-term ownership tax credit set at 6 million won…Extra 2 trillion won in comprehensive real estate tax

Complaints are also expected from senior citizens who have owned ultra high-end homes for an extended period. Under the new system, a cap on the maximum total comprehensive real estate tax credit is being introduced, limiting combined senior citizen and long-term ownership tax credits for single-home owners to 8 million won in 2027 and then to 6 million won from 2028 onward.

Currently, only the maximum credit rate of 80% applies, with no cap on the maximum creditable amount. As a result, if a taxpayer’s liability exceeds 100 million won, they can still receive an 80% credit equal to 80 million won if they meet the requirements.

In consideration of expected backlash, the government has also presented supplementary measures to lower the threshold for comprehensive real estate tax deferral. These include easing income requirements, as well as reducing the interest burden if taxpayers have lived in the property for more than 10 years or provide tax guarantee insurance as collateral.

The government estimates that total tax revenues will increase by 3.443 trillion won between 2027 and 2031. Of this, the increase in comprehensive real estate tax is expected to account for 2.1815 trillion won, or 63% of the total.

This content was produced with the assistance of AI translation services.