South Korea's tax chief suggests reform for single-home owner tax break, citing Seoul concentration

South Korea's National Tax Service Commissioner Im Kwang-hyun has signaled the necessity of reforming the long-term holding special tax deduction for single-home owners. This move comes just three days after President Yoon Suk-yeol publicly warned that the preference for owning a single, high-value property, often referred to as a "strong single home" (똘똘한 한 채), is creating serious societal problems.

Im Kwang-hyun's comments suggest a potential shift in tax policy aimed at addressing the concentration of benefits from this deduction. Reports indicate that a significant majority, approximately 90%, of the benefits from the long-term holding special tax deduction are currently enjoyed by homeowners in Seoul, highlighting a regional disparity.

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"90% of the benefits of the long-term holding special deduction go to Seoul."

The commissioner's proactive stance indicates that the government is seriously considering concrete measures to tackle speculative housing demand and the uneven distribution of tax benefits. The upcoming government tax reform plan, expected early next month, is anticipated to include these adjustments.

This initiative is seen as a direct response to concerns that the current system may inadvertently encourage property speculation and exacerbate housing inequality, particularly in the overheated Seoul real estate market. The proposed reforms are expected to recalibrate the tax incentives to promote a more balanced housing market across the country.

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The preference for a 'strong single home' has caused serious problems.