South Korea Keeps Property Tax Deduction for Non-Resident Homeowners
Seoul, South Korea | September 3, 2026: South Korea has withdrawn its proposal to reduce the property tax deduction available to single-home owners who do not live in their properties, following public criticism over the planned change. The government will retain the existing 1.2 billion won deduction under the comprehensive real estate holding tax.
Government Reverses Proposed Tax Deduction Cut
The government had proposed lowering the basic deduction for single-home owners who do not reside in their properties from 1.2 billion won to 900 million won. The measure was intended to increase the tax burden on high-value and non-owner-occupied homes amid concerns over rising property prices and investment demand.
However, the proposal faced criticism over its potential impact on homeowners, prompting the government to reconsider the change.
Higher Deduction for Owner-Occupied Homes
While the deduction for non-resident homeowners will remain unchanged, South Korea has increased the basic deduction for single-home owners who actually live in their properties.
The deduction for owner-occupied single homes will rise from 1.2 billion won to 1.4 billion won in assessed value. This maintains a tax advantage for homeowners who occupy their properties while avoiding the sharper reduction initially proposed for non-resident owners.
Jeonse System Influences Property Tax Debate
One factor behind the criticism is South Korea's widespread jeonse rental system, under which tenants typically provide landlords with a large refundable deposit instead of paying monthly rent.
The system can allow property owners to hold homes that are occupied by tenants while the owners live elsewhere. It can also enable buyers to finance purchases using the difference between a property's market price and its jeonse deposit.
As a result, policymakers face challenges in distinguishing between speculative property ownership and legitimate non-owner-occupied housing arrangements.
Annual Property Tax Increase Cap Also Retained
The government has also abandoned a separate proposal to raise the annual increase ceiling on the comprehensive real estate holding tax from 150% to 200% of the previous year's bill.
The existing 150% limit will remain in place, reducing the potential for sharp year-on-year increases in property tax liabilities.
What the Decision Means for Property Owners
For single-home owners who do not reside in their properties, retaining the 1.2 billion won deduction avoids the additional tax exposure that would have resulted from the proposed 900 million won threshold.
For owner-occupiers, the increase to a 1.4 billion won deduction provides further tax relief. The revised approach therefore continues to differentiate between owner-occupied and non-owner-occupied housing while avoiding the more aggressive tax tightening initially proposed.
South Korea Balances Housing Stability and Tax Burden
The policy reversal comes as South Korea continues to address high housing prices, particularly in Seoul. The government is seeking to control investment-driven demand while also limiting the impact of tax reforms on homeowners.
For property investors and homeowners, the decision provides greater clarity on the immediate tax treatment of single-home ownership as South Korea continues to adjust its housing and taxation policies.