Comprehensive Real Estate Tax and Capital Gains Tax Both Changed... Increased Tax Burden for Multiple Homeowners

Including Pre-sale Rights in Housing Count for Capital Gains Tax Imposition
Based on Houses Owned as of 'June 1'

[Asia Economy Reporter Jang Sehee] Tax burdens related to housing will increase, especially for multi-homeowners.

According to the Ministry of Economy and Finance on the 3rd, the comprehensive real estate tax rate for housing will rise from 0.5-2.7% to 0.6-3.0% for general taxpayers, and the rate applied to those owning three or more homes or two homes in regulated areas will increase from 0.6-3.2% to 1.2-6.0%. For corporations, the highest rates applied to individuals, 3.0% and 6.0%, will be applied.

Currently, homes held for less than one year are taxed at 40%, and those held for less than two years are taxed at the basic rate. However, for transfers after June this year, the tax rate for homes held less than one year will increase by 30 percentage points to 70%. A single tax rate of 60% will apply to homes held less than two years.

To reduce the burden on single-homeowners with actual demand, the elderly tax credit rate will be increased by 10 percentage points.

Until now, pre-sale rights were not included in the number of homes when imposing capital gains tax, but starting this year, pre-sale rights will be included in the number of homes when selling homes in regulated areas, and capital gains tax will be imposed accordingly.

If a person owns a single high-priced home with a real transaction price exceeding 900 million KRW and has lived there for more than two years, they used to receive a long-term holding special deduction of 8% per year of holding period up to a maximum of 80%. From this year, the deduction is divided into 4% per year of holding period and 4% per year of residence period. To receive the maximum 80% deduction, the home must have been held and lived in for more than 10 years, with 40% each for holding and residence periods.

Meanwhile, taxes imposed this year will be based on homes owned as of June 1. The increase in capital gains tax rates will also apply to homes sold after June 1 accordingly.

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