"Expand Residency Exceptions" Flood of Public Opinions on Real Estate Tax Reform Proposal

Thousands of Comments Submitted on Real Estate and Capital Gains Tax Amendments
Government Vows to Proactively Review Reasonable Proposals

The government’s proposed amendments to real estate tax laws are attracting a flood of legislative opinions from the public. There is a range of responses, from backlash against the increased tax burden to demands for expanding exceptions that recognize actual residence.

Yonhap News

According to the National Law Participation Center under the Ministry of Government Legislation on August 9, more than 2,050 public comments had been submitted by 6 p.m. on August 8 regarding the amendment to the Comprehensive Real Estate Holding Tax Act, which the Ministry of Strategy and Finance announced on August 4. The partial amendment to the Income Tax Act, which includes revisions to the capital gains tax, received over 1,400 opinions.

The vast majority of submitted opinions oppose the increased comprehensive real estate tax rate, though there are also many voices calling for practical measures that reflect real life circumstances. In particular, there are strong demands to broaden the scope of exceptions for unavoidable non-residence, allowing more situations to be recognized as valid reasons for not occupying one's home.

According to the amendment, a person who owns a single home and who moves due to reasons such as schooling, job relocation, medical treatment, staying abroad, or supporting parents, after having resided in the property for more than one year, can have an absence of residency recognized as a period of residence for up to three years. Additional opinions have been submitted urging that reasons such as child-rearing or family care should also be included as exceptions. This is intended to cover cases such as grandparents moving closer to their children’s homes to care for grandchildren, resulting in their previous home remaining vacant.

However, the government cautions that allowing excessive exceptions for child-rearing could be exploited as a means of gap investment, where buyers in Seoul and other major areas purchase homes while keeping rental tenants in place to benefit from speculation opportunities.

There have also been requests to ensure that the period of remodeling work under the Housing Act is recognized in the same way as the provision that counts half of the construction period due to redevelopment or reconstruction toward the residence period. Such exceptions for non-residence will be further specified in future amendments to the enforcement decree.

Deputy Prime Minister and Minister of Strategy and Finance Koo Yoonchul is attending a closed party-government meeting of the National Assembly's Committee on Strategy and Finance held at the National Assembly Members' Office Building to discuss tax reform on the 30th. July 30, 2026. Photo by Hyunmin Kim

Deputy Prime Minister and Minister of Strategy and Finance Koo Yoon-chul stated in a recent broadcast interview that the government will consider with flexibility situations that are deemed unavoidable from the public’s perspective. He explained that the scope of application will be determined by further gathering public feedback during the process of amending the enforcement decree after the bill is passed. However, he also pointed out that excessively broad criteria for exceptions could lead to abuses that undermine the purpose of the system.

Additional opinions include calls to further raise the basic deduction amount for single-homeowners in joint spousal ownership, and criticisms that the relaxation of income requirements to qualify for tax payment deferral remains insufficient. There are also arguments that the reduction in the cap for special long-term ownership deductions should not be applied retroactively to existing homeowners, and requests that non-apartment properties such as officetels be taken into account when determining multi-homeowner status.

The government will continue fielding public opinions on the proposed bill until August 20 and plans to analyze the feedback by type. Following vice-ministerial and cabinet meetings, the government plans to submit the amendment to the regular session of the National Assembly in early September.

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