South Korea Keeps 12 Billion Won Property-Tax Deduction for Nonresident Single-Home Owners

South Korea’s government has reversed a proposed property-tax penalty for people who own one home but do not live in it. The basic deduction will remain at 12 billion won instead of falling to 9 billion won, and the tax-burden ceiling will stay at 150% rather than rise to 200%.

The retreat came 29 days after the government announced the measures. Concerns had persisted that nonresident owners could face a sudden tax increase and that the supply of homes available for rent could shrink.

The government finalized the changes at a cabinet meeting on the first day of the month, after consultations between ministries and a period for public notice. The package covers 11 tax measures, including amendments to the comprehensive real estate tax and income tax laws.

The government kept its plan to raise the basic deduction for owner-occupied single homes from 12 billion won to 14 billion won. For nonresident couples who jointly own one home, the deduction will be 6 billion won per person, rather than the 4 billion won originally proposed. Owner-occupying couples will continue to receive 9 billion won each.

A separate plan to shift the long-term capital-gains deduction toward the period of residence remains in place. From 2029, the government plans to end the deduction based on ownership duration and apply an annual 8% deduction based only on residence, with a maximum deduction of 10 billion won. The government also withdrew plans to remove the subscription-period limit and rollover of unused contributions for standard individual savings accounts. Parliament is due to review the package during its regular session.