The government's reform of the comprehensive real estate tax will reduce the tax burden for homeowners with properties valued under 3 billion won. The tax will begin to increase for homes valued at 3.5 billion won, and for properties worth 5 billion won, the tax will more than double compared to the current system.
According to the '2026 Tax Reform Plan' released by the Ministry of Finance on August 3, the comprehensive real estate tax for a single homeowner aged 60 who has lived in a home valued at 2 billion won for 10 years will decrease from 276,000 won to 108,000 won by 2028.
For homes valued at 2.5 billion won, the tax will drop from 461,000 won to 323,000 won, and for properties worth 3 billion won, it will decrease from 910,000 won to 760,000 won. This means a reduction of 138,000 won and 150,000 won, respectively.
However, the tax burden will start to increase for homes valued at 3.5 billion won. The tax for a 3.5 billion won home will rise from 1,918,000 won to 2,124,000 won, an increase of 206,000 won. For homes valued at 4 billion won, the tax will increase from 2,627,000 won to 3,252,000 won, a rise of 625,000 won.
For properties worth 5 billion won, the tax will increase from the current 4,539,000 won to 6,146,000 won in a mid-stage by 2027. By the final stage in 2028, it will rise to 9,785,000 won, which is 2.2 times the current amount.
The total property tax, combining property tax and comprehensive real estate tax for homes valued at 5 billion won, will increase from 13,548,000 won to 15,155,000 won in 2027, and to 18,794,000 won in 2028.
This is a result of increasing the basic deduction for single homeowners from a publicly assessed price of 1.2 billion won to 1.4 billion won and adjusting the fair market value ratio from the current 60% to 70%. The government plans to unify the comprehensive real estate tax rate based on property value rather than the number of homes owned and limit the tax credit to 8 million won in 2027 and 6 million won in 2028.
If the deduction based on age and residency is small, the actual tax burden will increase. For a 50-year-old homeowner who has lived in a home valued at 3 billion won for two years, the comprehensive real estate tax will decrease from 2,275,000 won to 1,901,000 won by 2028, but for a 3.5 billion won home, it will rise from 4,795,000 won to 5,309,000 won. For a 5 billion won home, it will increase from 11,347,000 won to 16,985,000 won.
The Ministry of Finance explained that homes valued up to 2 billion won will be excluded from the comprehensive real estate tax, and the range between 2 billion and 3 billion won is designed to lower the tax burden. The tax changes for homes valued between 3 billion and 4 billion won are minimal, but properties exceeding 4 billion won will see a larger increase due to the impact of high-value home tax rates and tax credit limits.
Based on this year's publicly assessed prices for multi-family homes, approximately 16,774 homes nationwide exceed a value of 3 billion won, representing 1.06% of the total. Homes valued over 4 billion won number about 6,451, representing the top 0.41%, while those over 5 billion won total 2,996, representing the top 0.19%.
However, this statistic is based on the number of homes and includes non-residential properties and homes owned by multiple homeowners, making it difficult to distinguish single homeowners. Last year, the number of comprehensive real estate tax payers was 480,577, which is about 3% of the total 15.98 million homeowners as of 2024.
The government stated that it did not design the tax system based on pre-established criteria for ultra-high-value homes. A Ministry of Finance official explained, "The adjustments to the fair market value ratio, tax rates, basic deductions, and tax credit limits resulted in a larger increase in the burden for homes valued between 4 billion and 5 billion won."
The increase in tax revenue from the comprehensive real estate tax reform, excluding the special rural tax, is estimated to be 800 billion won in 2027, 1.1 trillion won in 2028, and 300 billion won in 2029, totaling 2.2 trillion won.
* This article has been translated by AI.
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