Higher Taxes Imposed on Owners Who Leave Old Vacant Buildings Neglected

The government has decided to push forward measures to increase the tax burden on owners who neglect old vacant houses or buildings. Conversely, when these structures are demolished, various costs and burdens will be reduced. For vacant buildings with reasonable potential for use, incentives such as increased floor area ratio will be offered to encourage maintenance and development projects.

On October 2, the Ministry of Land, Infrastructure and Transport announced these measures to promote the revitalization of vacant building maintenance at the Economic Ministers' Meeting. As of last year, there were more than 130,000 vacant houses and over 60,000 non-residential vacant buildings nationwide. The ministry judged that the failure to maintain these vacant buildings in a timely manner was accelerating regional decline, and thus presented countermeasures led by the ministry.

A shopping area at the entrance of a traditional market near a residential neighborhood in Michuhol-gu, Incheon is being neglected. 2025.05.22 Photo by Yoon Dongju

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Given that existing related systems and regulations were scattered, making systematic approaches difficult, the government will introduce a "Special Act on Vacant Building Maintenance" to address previously insufficient aspects. This will cover not only vacant houses left uninhabited or unused for over a year, but also non-residential buildings over 20 years old and buildings with suspended construction. Even buildings not falling under these categories but with low potential for use will be included as potential management targets.

In locations with low utility, the government anticipates that owners are unlikely to voluntarily demolish their buildings, so both incentives and penalties will be introduced. Owners will be required to fulfill management obligations such as safety measures or demolition, and the penalty for non-compliance will be increased. Currently, the penalty ranges from 2 million won to up to 10 million won per year. Additionally, the government is considering imposing a separate tax or a heavier tax rate on vacant buildings, similar to practices in other countries.

In the United States, some regions impose a vacancy tax of up to 10% on buildings left empty for more than 30 days. In the United Kingdom, local taxes on houses left vacant for over a year can be tripled. The intention is to impose an economic burden, given the significant social costs of neglected vacant buildings. After demolition, if the land is used for public or communal purposes, the property tax on the land will be reduced by 50% for five years. For new houses or buildings constructed on demolished land, the acquisition tax will be reduced by up to 50% (within a limit of 1.5 million won).

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The period for demolition orders issued by local governments will be shortened from within six months after the establishment of a maintenance plan and review by the building committee to within two months. If there are significant concerns about collapse or disasters, demolition orders will be made mandatory, and if owners do not comply, local governments will be able to demolish the buildings directly and claim reimbursement from the owners. Previously, demolition costs were deducted from compensation, but if the demolition cost exceeded the compensation, it was difficult for local governments to recover the difference. In addition, if disasters or collapses are anticipated, administrative procedures such as advance notice or notification may be omitted to allow immediate execution.

When carrying out development projects, if a developer purchases and demolishes a vacant building outside the designated project area and donates the land, incentives such as increased floor area ratio or green space exemptions will be provided. The government also plans to add a "vacant house maintenance" option to the public support program for old residential area maintenance, subsidizing demolition costs.

For vacant buildings with relatively high potential for use, the government expects them to be traded on the market and will improve the existing platform managed by the Korea Real Estate Board (Binjipae). In addition, a special purpose company (SPC) called "Vacant Building Hub" will be established using the Urban Account of the Housing and Urban Fund. Through this company, old or dilapidated buildings will be purchased and either sold to the private sector or developed for public use.

A residential area in Michuhol-gu, Incheon. Vacant houses left unattended can be seen here and there. 2025.05.22 Photo by Yoon Dongju

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The government also plans to reorganize existing "vacant house concentration zones" into "vacant building maintenance promotion areas" (tentative name), allowing the floor area ratio to be increased by up to 1.3 times the legal limit. Furthermore, regulations will be made more flexible, allowing the use of existing vacant buildings as accommodations or commercial facilities without restrictions, while preserving their unique characteristics.

Lee Sangkyung, First Vice Minister of the Ministry of Land, Infrastructure and Transport, stated, "The neglect of vacant buildings is causing a vicious cycle of deteriorating residential environments and accelerating the extinction of local communities. We will proactively maintain dangerous vacant buildings with risks of collapse or disaster, while supporting the utilization of vacant buildings as resources to revitalize local areas."

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