South Korea has proposed a series of property tax changes that would increase taxes on wealthy homeowners while reducing the burden on many people who own and live in a single home. The move comes as President Lee Jae Myung‘s government looks for ways to cool the country’s rapidly rising housing market and respond to growing public concern over high home prices.
The proposals were announced after a closed-door meeting chaired by President Lee Jae Myung, where officials discussed conditions in the housing and stock markets. The government has faced mounting pressure after house prices continued to climb and concerns over market volatility affected public sentiment.
Finance Minister Koo Yun-cheol said the tax reforms are designed to make housing a place to live rather than an investment. “We will reform real estate taxes in a reasonable manner to establish a residence-oriented housing market under the principle that a home is a place for living, not buying,” Koo said, as reported by Reuters.
What tax changes has South Korea proposed?
Under the proposed annual tax code revisions, homeowners who own a single house and live in it would receive higher property tax exemptions. At the same time, people who own multiple homes or expensive properties would face a heavier tax burden.
The finance ministry has proposed increasing real estate holding tax rates by as much as 2.3 percentage points, depending on the value of the property, reported Reuters. Other changes would also increase taxes on owners of multiple homes and high-value residential properties.
Koo said the government wants to ease the burden on ordinary homeowners while asking wealthier property owners to pay more. “For households that own one house, the tax burden will decrease if their house is under 3 billion won ($2.1 million). From 3 billion won to 4 billion won, it will be raised in slices, and it will be more normalised for those between 4 billion to 5 billion,” he said, as reported by Reuters.
The proposals will now be submitted to Parliament by September 3, where lawmakers will decide whether to approve the changes.
Why is government changing property taxes?
The proposals come after South Korea’s housing market continued to heat up. House prices rose for the 13th consecutive month in June, marking the biggest monthly increase since November 2021.
In July, the Lee administration organised a series of public forums to gather views on housing market policies as concerns over affordability continued to grow.
The issue has also become politically significant. According to a Gallup Korea survey conducted on July 24, President Lee’s approval rating fell to 51%, the lowest level in a month, reported Reuters. For the first time since he took office in June 2025, housing policy emerged as the biggest reason behind negative public opinion.
South Korea’s central bank has also expressed concern about rising house prices. The Bank of Korea raised interest rates last month for the first time in three-and-a-half years, warning that strong earnings in the semiconductor industry could add to inflationary pressures and push property prices even higher, reported Reuters.
Alongside the property tax proposals, the finance ministry announced plans to introduce tax incentives for domestic production in strategic industries. The proposed exemptions would cover sectors including solar energy, wind power, rechargeable batteries, semiconductors, key industrial materials and artificial intelligence robots.