"Taking a Closer Look"... Government Reconsiders ISA and 'Stock Price Suppression Prevention Bill'

The government has decided to reconsider both the Individual Savings Account (ISA) reform and the so-called "Stock Price Suppression Prevention Act." This follows President Lee Jaemyung’s directive for a comprehensive review of both issues. The government also intends to incorporate feedback from the political community and various stakeholders that was submitted during the public notice and comment stage.

According to relevant ministries on August 9, the Ministry of Economy and Finance is reviewing the backlash against aspects of the ISA reform, such as the elimination of the rollover limit and the reduction of the contract period to five years (three plus two years). There has also been criticism that the newly proposed "Productive Finance ISA," which restricts investments to domestic assets, will limit the options available to existing account holders.

The government is also reconsidering supplemental measures to prevent "stock price suppression," in which stock prices are intentionally pushed down to reduce inheritance or gift taxes. The government had suggested using companies with low price-to-book ratios (PBR)—specifically, the bottom 25% by sector in the KOSPI and the bottom 10% in the KOSDAQ over the past six years—as criteria. However, critics have pointed out that this could allow companies to manipulate stock prices only during certain periods, potentially exposing loopholes.

On the 5th, apartment sale information is posted in front of a real estate agency located within a large apartment complex in downtown Seoul. 2026.02.05

More than 4,000 legislative opinions have been submitted regarding the proposed real estate tax reforms. In particular, there are ongoing demands to expand the exceptions that allow certain periods to count as actual residence when calculating the comprehensive real estate holding tax and capital gains tax.

The government proposal recognizes up to three years of non-resident status as resident years in cases such as school enrollment, job change, illness, school transfer, overseas assignment, or care for parents in another region. There are also opinions calling for exceptions to be extended to circumstances such as childcare, family care, or temporary relocation due to remodeling.

The government plans to take into account the potential for misuse, such as gap investment, while also reflecting public opinion. As a result, the government will flexibly review exception conditions and recognition periods when preparing implementation ordinances.

The method of applying the comprehensive real estate holding tax deduction for couples owning a single home jointly is also a source of controversy. Although the basic deduction amount has been raised from 1.2 billion won to 1.4 billion won, concerns persist that the system is overly complex, since the relative benefit of individual taxation versus the single-home exemption depends on both the owner's residence status and the property value.

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