South Korea’s government announced its 2026 tax reform plan on August 3, raising both holding and transaction taxes on non-resident single-home owners and owners of high-value homes. Just two days later, the Korean Association of Public Finance convened an emergency expert meeting in Seoul on August 5, where fiscal scholars openly criticized the plan’s direction.
Kim Woo-cheol, professor at the University of Seoul and the association’s president, told the meeting the revision “seems to be a form of wealth tax that reduces the number of taxpayers while increasing the tax burden on owners of ultra-luxury homes.” Shim Hye-jung, a former tax analysis review officer at the National Assembly Budget Office, said the reform’s purpose is unclear — the government has not explained whether it aims at income redistribution through higher taxation or at other policy goals.
A Korea JoongAng Daily editorial laid out the plan’s mechanics: the government intends to abolish a special deduction for long-term residents and introduce a new income deduction for long-term homeownership capped at 1 billion won (about $698,000), with a one- to two-year grace period — in effect telling owners to sell within that window to retain the tax benefit. The editorial also flagged an internal contradiction: across all of Seoul and 15 areas of Gyeonggi, the land transaction permit system requires buyers to move in within four months, making expensive homes with sitting tenants effectively hard to sell. Critics quoted by the editorial say the government is telling people to sell while making it impossible to either sell or buy.
For non-residents holding property in South Korea, both holding and transaction costs would rise if the plan passes. The plan still needs to go through the National Assembly; both the association and the editorial expect the controversy to continue.
References
Chosun Ilbo — Experts Criticize Property Tax Overhaul as Wealth Tax Shift
Korea JoongAng Daily — A tax reform full of contradictions will only deepen confusion in the housing market
