South Korea Restores 75% Capital Gains Tax on Multiple Homes Effective May 9
Updated (3 articles)
Cabinet Approves Revision Ending Temporary Exemption The South Korean cabinet voted on February 24, 2026 to amend the Income Tax Act enforcement decree, terminating a four‑year exemption for multiple‑home owners and reinstating the prior tax regime [1][2]. The amendment will be formally promulgated on February 27 and will take effect on May 9, 2026 [1][2]. Finance Minister Koo Yun‑cheol announced supplementary measures to clarify contract timing and payment rules, aiming to reduce public inconvenience [1].
Maximum 75 Percent Rate Applied to Speculative Zones The revised rule imposes a capital‑gains tax of up to 75 percent on sales of properties owned by multiple‑property holders in designated speculative areas [1][2]. These zones cover the wider capital region, primarily greater Seoul and selected districts of Gyeonggi Province [1][2]. The high rate targets properties that contribute to rapid price increases in these markets [1][2].
President Lee Jae Myung Cites Housing Stability Goals President Lee Jae Myung emphasized that the measure seeks to stabilize rising housing prices and curb real‑estate speculation, especially in the greater Seoul area [1][2]. He framed the policy as essential for long‑term housing market health after the previous Yoon Suk‑yeol administration postponed the tax [1][2]. The administration presented the tax as a corrective step following almost four years of exemption [2].
Grace Periods for Tenant‑Occupied Units Tenants occupying affected properties receive a grace period of four months in Seoul’s Gangnam and Yongsan districts and up to six months in other designated zones, provided final payments or registration are completed within that timeframe [1][2]. The conditions tie the grace period to the timing of contract settlement and ownership transfer [2]. These provisions aim to protect current occupants while the higher tax regime becomes operational [1].
Sources
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1.
Yonhap: South Korean Cabinet Restores 75% Capital Gains Tax on Multiple Homes – Details the cabinet’s February 24 decision, Finance Minister Koo Yun‑cheol’s supplementary measures, and the four‑ to six‑month tenant grace periods, highlighting the policy’s return after a four‑year pause .
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2.
Yonhap: South Korea Resumes 75% Capital Gains Tax on Multiple‑Home Owners – Focuses on the reversal of the exemption, President Lee Jae Myung’s housing‑stability rationale, and the grace‑period conditions, without mentioning the finance minister’s supplementary actions .
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Timeline
2022‑2023 (Yoon Suk Yeol administration) – The government postpones the heavy capital‑gains tax on multiple‑home owners, creating a temporary exemption that lasts almost four years until the 2026 reversal[1][2].
Feb 5, 2026 – Finance Minister Koo Yun‑cheol announces that the government will unveil supplementary measures the following week to ease the burden on owners of multiple homes as the exemption ends on May 9, saying the aim is to “minimize inconvenience to the public, including those who own rental properties”[3].
Feb 5, 2026 – President Lee Jae Myung warns that ending the multiple‑home capital‑gains exemption is intended to curb speculation, lower housing costs and encourage marriage and childbirth, stressing the need for price stability[3].
Feb 5, 2026 – Authorities consider grace periods of up to three months for properties in Gangnam and Yongsan and up to six months for newly designated speculative zones, contingent on final payments or registration within those windows[3].
Feb 5, 2026 – Capital‑gains rates range from 6 % to 45 %; owners of two homes face a 20‑point surcharge and those of three homes a 30‑point surcharge, while the jeonse lease system underpins many rentals and shapes policy impact[3].
Feb 24, 2026 – The South Korean Cabinet approves a revision to the Income Tax Act enforcement decree that ends the temporary exemption for multiple‑home owners and reinstates a maximum 75 % capital‑gains tax on sales in designated speculative zones, mainly the greater Seoul region, effective May 9[1][2].
Feb 24, 2026 – President Lee Jae Myung reiterates that the measure aims to stabilize rising housing prices and curb real‑estate speculation in the greater Seoul area[1][2].
Feb 24, 2026 – The decree grants tenant‑occupied units a grace period of four months in Gangnam and Yongsan and up to six months in other speculative zones, provided final payments or registration occur within that timeframe[1][2].
Feb 27, 2026 – The revised enforcement decree is scheduled to be promulgated, formalizing the tax change and the accompanying supplementary measures announced by Finance Minister Koo[1].
May 9, 2026 – The 75 % maximum capital‑gains tax on multiple‑home sales in designated speculative areas takes effect, ending the nearly four‑year exemption created under the previous Yoon Suk Yeol administration[1][2].