The Ministry of Economy and Finance decided at a Cabinet meeting on September 1, 2026, to keep the comprehensive real estate holding tax basic deduction for nonresident single-home households at KRW 1.2 billion. The plan to reduce the deduction to KRW 900 million, announced in the initial tax reform proposal on August 3, was withdrawn in the final revised proposal.
Key changes
The basic deduction for a nonresident single homeowner was originally scheduled to fall from KRW 1.2 billion to KRW 900 million, but the final proposal restores it to KRW 1.2 billion. For nonresident married couples who jointly own one home, the basic deduction was initially set at KRW 400 million per person and has been raised to KRW 600 million per person in the final proposal.
The basic deduction for owner-occupied single-home households will increase from KRW 1.2 billion to KRW 1.4 billion, as proposed in the initial reform plan. The comprehensive real estate holding tax burden cap will remain at the current 150%, contrary to the government's original plan to raise it to 200%.
| Category | Initial reform proposal | Final proposal |
|---|---|---|
| Basic deduction for nonresident single homeowner | KRW 900 million | KRW 1.2 billion |
| Basic deduction for nonresident married joint owners | KRW 400 million each | KRW 600 million each |
| Basic deduction for owner-occupied single homeowner | KRW 1.4 billion | KRW 1.4 billion |
| Comprehensive real estate holding tax burden cap | Plan to raise to 200% | Remains at 150% |
Current status
The Ministry of Economy and Finance plans to submit the 11 finalized tax law amendment bills to the National Assembly by September 3, 2026, where they will undergo review during the regular session. This announcement therefore reflects the content of the amendments finalized by the government; the legal changes will not be complete until they pass National Assembly review and a vote.
The final proposal as announced does not mean that all system changes will take effect immediately.
Impact
Under the revision, the basic deduction for nonresident single homeowners is KRW 300 million higher than under the proposed reduction. However, the actual comprehensive real estate holding tax and changes in an individual taxpayer's liability may vary depending on the official property value, joint ownership status, actual period of residence, tax rates, and the fair market value ratio.
The People Power Party has called for a reassessment of the tax revenue effects of the revised proposal and the release of tax burden incidence data, arguing that tax-raising measures such as an increase in the fair market value ratio remain even after some comprehensive real estate holding tax and ISA measures were withdrawn. These are political demands by a party and should be distinguished from the policy content finalized by the government.
Next checkpoint
The first checkpoint is whether the bill is submitted to the National Assembly by September 3. After that, it will be necessary to monitor how the final proposal is reflected during the regular session's review and voting process.
When assessing the comprehensive real estate holding tax burden on an individual home, it is difficult to conclude that taxes will necessarily decrease based solely on the revised basic deduction figures.