Koo Yoon-chul: “Taxation on Homes Worth Over 4 Billion Won Normalized... Only 0.4% of All Homes”

"Excluding Homes Valued Under 2 Billion Won From the Comprehensive Real Estate Holding Tax"
Tax Reform Plan to "Support Economic Growth"
"We Will Announce Additional Housing Supply Measures Soon"

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol stated on August 3 that, regarding the property tax reform, “Homes valued at 4 billion won or more account for approximately 0.4% of all residences,” adding, “In the past, tax burdens were far too low compared to housing prices, so the taxation has been normalized.”

Appearing on ‘KBS News9’ in the evening, Deputy Prime Minister Koo responded to a question about potential backlash over the burden on single homeowners by saying, “For homes valued at 3 billion won or less, taxes have actually been reduced, and homes under 2 billion won have been excluded from the comprehensive real estate tax.”

He further explained, “For homes representing 1.1% of the total housing stock, even up to 4 billion won, the increase in tax burden is minor; normalization of taxation begins only for homes valued between 4 billion and 5 billion won.”

Earlier that day, the government announced the '2026 Tax Reform Plan,' which includes changes to the comprehensive real estate tax and capital gains tax. On the expected effects of the property tax reform, Deputy Prime Minister Koo said, “The intent is to emphasize the meaning of homes as places where people live, highlighting their role as residential housing.”

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol is attending a closed ruling party-government meeting of the National Assembly's Planning and Finance Committee for tax reform discussions at the National Assembly Members' Office Building on the 30th of last month. Photo by Kim Hyun-min

Regarding property transactions, he stated, “There is a plan to provide capital gains tax benefits for homes sold after being owner-occupied for more than 10 years,” and added, “To stimulate transactions, there are also efforts to grant benefits if rental properties are sold within a set period after the lease period ends.”

On the overall tax reform plan, he said, “This is a tax code designed to support economic growth,” explaining that “we are newly introducing the domestic production tax credit system, and expanding coverage to include parts of national strategic technologies that utilize nuclear power such as small modular reactors (SMRs).”

He further stated, “This is a comprehensive tax reform plan that includes rationalizing property taxation, expenditure tax measures, and business inheritance deductions—all to ensure fair and equitable taxation.”

In response to concerns that the tax reform could harm real demand in the monthly rental and lease market, he said, “We are also preparing measures to facilitate housing supply and address the difficulties faced by first-time buyers, young people, and newlyweds in securing the necessary housing finance.”

Regarding housing supply measures, he hinted at further announcements: “We are even partially lifting greenbelts and utilizing areas near subway lines and various military facilities owned by the state to maximize supply; I expect to report more details to the public soon.”

On the extension of the grace period for the heavy capital gains tax on multiple-home owners, he said, “Some have questioned the continued imposition of the heavy tax rate and whether it suits the current reality. Granting a grace period was a realistic consideration.”

Deputy Prime Minister Koo concluded by saying, “Please understand that the voices of the people have been listened to and reflected in this tax reform.”

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