South Korea Sets May 9 End to Multiple‑Home Tax Break, Considers Grace Period
Updated (2 articles)
Exemption Termination Date Confirmed The capital‑gains tax exemption for owners of two or more homes will expire on May 9, 2026, as announced by Finance Minister Koo Yun‑cheol during a Cabinet briefing and reiterated by President Lee Jae‑Myung’s office [1][2]. The deadline aligns with the administration’s pledge to curb speculative buying and normalize market conditions. Officials warned multiple‑home owners that the post‑deadline tax burden will rise sharply, making the May 9 date the “last opportunity” to avoid higher rates.
Current Capital Gains Rates and Surcharges Real‑estate sales are taxed on a sliding scale from 6 % to 45 % depending on price and holding period [1][2]. In designated speculative zones, owners of two homes face an additional 20 percentage‑point surcharge, while owners of three homes incur a 30‑point surcharge on top of the base rate [1][2]. These heightened rates target investors perceived to be driving price inflation in hot‑spot districts.
Grace Period Proposal for Select Districts The government is weighing a grace period that would allow sales in Seoul’s Gangnam and Yongsan districts to be completed up to three months after May 9, and up to six months for properties in newly designated speculative zones, provided final payment or registration occurs within those windows [1]. This measure aims to soften the impact on sellers who are close to the deadline, though the proposal was not mentioned in the earlier February 2 announcement [2].
Emphasis on Stabilization Over New Tax Overhauls President Lee Jae‑Myung has repeatedly used social‑media channels to stress that the exemption will not be extended, signaling a firm stance against further tax relaxations [2]. Spokesperson Kang Yu‑jung indicated that broader tax revisions will be considered only if existing stabilization policies fail, underscoring the administration’s focus on enforcing current measures rather than launching new reforms [2]. The overall strategy is presented as a “last resort” to address market unfairness without overhauling the tax system [1].
Sources
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1.
Yonhap (Feb 3, 2026): South Korea to End Multiple‑Home Tax Break on May 9, Grace Period Discussed – Details the May 9 termination, Finance Minister Koo’s briefing, and the proposed three‑ to six‑month grace periods for specific Seoul districts, emphasizing the push to curb unfair market practices.
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2.
Yonhap (Feb 2, 2026): South Korea’s Capital Gains Tax Exemption for Multiple Homeowners Set to End May 9 – Announces the same May 9 deadline, cites President Lee’s social‑media messaging, outlines current tax rates and surcharges, and stresses that broader tax reforms are a fallback option.
Timeline
Feb 2, 2026 – President Lee Jae Myung, through spokesperson Kang Yu‑jung, announces on social media that the multiple‑home capital‑gains tax exemption will not be extended past May 9, 2026, stressing the deadline to curb speculation and noting that any further tax revision will be a “last resort” if current measures fail [2].
Feb 3, 2026 – Finance Minister Koo Yun‑cheol briefs the Cabinet that the exemption ends on May 9, 2026, proposes a grace period of up to three months for sales in Gangnam and Yongsan and up to six months in newly designated speculative zones, and urges owners to act now, calling it the “last opportunity” to avoid the higher 20‑point or 30‑point surcharge on top of the 6‑45 % base rate [1].
May 9, 2026 – The multiple‑home tax break terminates, subjecting owners of two homes in speculative zones to an extra 20 percentage points and owners of three homes to an extra 30 percentage points on capital‑gains rates that already range from 6 % to 45 %, thereby aiming to normalize “abnormality and unfair practices” in the real‑estate market [1][2].