In January 2026, the Ministry of Finance established a new tax regime for “long‑term homeowners” (those who have owned a home for ten or more years). The new policy eases taxes on capital gains and property transfer when a house is sold. In particular, it introduces a tiered system that applies an annual 8 % capital‑gain tax to the “Long‑Term Homeownership Special Tax.” This allows long‑term owners to be taxed at rates up to 80 % while still allowing them to pay a 20–50 % rate when they sell.
The policy distinguishes between “holding” and “selling” and applies rates of 10, 20, or 25 % for holders depending on the length of ownership. For example, if a house is held for five to ten years then the holding tax drops to 10 %; after fifteen years it rises to 25 %. Conversely, when selling, the rate increases to 20, 40, or 50 %, showing how long‑term holders and sellers differ in tax burden. These changes encourage owners to reconsider the timing of sale as well as reduce capital‑gain and property taxes.
Under this policy, from 2028 only the selling tax applies; thereafter the annual 8 % is converted into the Long‑Term Homeownership Special Tax. The cap on the tax has also been raised from ₩6 million (for 2026) to ₩8 million, reducing property tax burden. Together with an expanded “deductible holding” system, owners whose holding tax exceeds a certain level can defer payment until they sell, allowing them to re‑evaluate at the time of sale.
We recommend that owners compare actual rates and apply them in practice, especially for those over 65 who have held for long periods; both liquidity constraints and tax burden must be considered. This analysis will help homeowners make informed decisions about when to sell.