Will the 900 Million Won Deduction for Non-Resident Single Homeowners' Property Tax Be Withdrawn? Koo Yuncheol Pledges “Decisive Revision”

Final Review by Tax Authorities Before Submission to the National Assembly

The government is reviewing a plan to partially reverse measures that strengthen the comprehensive real estate holding tax burden on “non-resident single homeowners.” The existing plan to reduce the basic deduction for non-resident single homeowners under the property holding tax to 900 million won is likely to be withdrawn and maintained at current levels, while the exceptions for non-resident status under the tax code will be significantly expanded.

According to related ministries on the 24th, the Tax Policy Office of the Ministry of Economy and Finance is holding final discussions on the “2026 Tax Reform Plan,” based on opinions raised at a recent high-level ruling-party-government policy coordination meeting, ahead of the September 3 submission deadline to the National Assembly. Key topics highlighted as major improvement points at the meeting included differentiating the basic deduction according to actual residency status for single homeowners, raising the upper cap on the comprehensive real estate holding tax burden to 200 percent, adjusting the fair market value ratio, and expanding reasons for exceptions to the non-resident rule.

Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol is reporting on the fiscal year 2025 settlement at the first plenary meeting of the Budget and Accounts Committee held at the National Assembly on August 24, 2026. Photo by Hyunmin Kim

First, the government is considering reversing the initial plan to lower the property holding tax deduction for non-resident single homeowners to 900 million won, restoring it to the current 1.2 billion won, or even raising it to 1.4 billion won to match resident homeowners. In the tax reform plan announced on August 3, the deduction for single household single homeowners was to be raised from 1.2 billion won to 1.4 billion won, while that for non-resident single homeowners was to be reduced from 1.2 billion won to 900 million won.

The intention was to curb distortions in the housing market by reducing tax benefits for non-resident homes, but in response to criticism that the policy would not stabilize home prices but would only shift higher rent and lease costs onto ordinary people, the government began reconsideration. At present, a plan to keep the deduction at 1.2 billion won for non-resident single homeowners, maintaining a differential from residents, is seen as the most likely path.

The option of recognizing residency for owners living elsewhere due to childcare, caregiving, or other family-related reasons is also being discussed. Under the draft government plan, a single homeowner who resided in their property for over a year but is temporarily living in another city or county due to reasons such as school enrollment, job relocation, medical treatment, overseas assignment, or parental care could have up to three years of residency recognized as an exception. However, there have been calls for broader eligibility for these exceptions.

During the Special Committee on Budget and Accounts at the National Assembly on this day, Deputy Prime Minister and Minister of Economy and Finance Koo Yuncheol emphasized, “If it is reasonable for single homeowners not to reside in the property, we are ready to actively recognize their situations as residency to resolve these issues,” adding, “We will listen closely to the various voices of the public and seek a more rational solution.” As the ruling party has directly called for improvement, the government has once again stated its intention to significantly expand the circumstances in which non-resident single homeowners' residency status will be recognized.

Deputy Prime Minister and Minister of Strategy and Finance Koo Yun-cheol is reporting on the fiscal year 2025 settlement at the 1st plenary meeting of the Special Committee on Budget and Accounts held at the National Assembly on August 24, 2026. Photo by Kim Hyunmin

Previously, in a high-level ruling-party-government meeting the day before, consensus was reached on expanding the scope of recognized residency for single homeowners who cannot live in their properties due to unavoidable reasons. Minseok Kim, leader of the Democratic Party, suggested, “Even if the current system for the property holding tax remains unchanged, a rise in the published property price will automatically increase the tax burden for non-residents, so perhaps simply increasing the basic deduction for residents to 1.4 billion won would be sufficient.” Spokesperson for the Democratic Party, Park Sungjun, also said, “For the property holding tax, our party has strongly requested that there should be no distinction between resident and non-resident single homeowners.”

Raising the deduction for non-resident single homeowners or increasing the comprehensive real estate holding tax rate involves amendments to the law, whereas adjusting the fair market value ratio and broadening the exceptions for non-resident status may be done by changing the enforcement decree at the government level. If the government submits a revised plan, it would need to go through a re-promulgation, review by the Ministry of Government Legislation, and approval at a Cabinet meeting prior to submission to the National Assembly. If statutory revisions contain provisions disadvantageous to the public, re-promulgation is required. A government official stated, “Given that the September 3 deadline for National Assembly submission is approaching, the government sees it as unlikely that a separate, revised plan will be announced prior to submission,” and added, “Submitting the original plan to the National Assembly, with amendments and adjustments made during the legislative process, is considered more reasonable.”

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