Korea REITs Association Requests Government to Extend Special Tax Benefits for Unsold Regional CR REITs by One Year

The Korea REITs Association has officially requested that the Ministry of Economy and Finance extend tax support for Corporate Restructuring REITs (CR REITs) that purchase unsold apartments in non-metropolitan areas for another year. This move aims to attract private capital to stabilize the market amid the worsening slump in regional construction.

The association stated on September 26, "The proposed amendments to the Corporate Tax Act and the Comprehensive Real Estate Holding Tax Act, which the government announced for legislative notice on September 12, only apply the special tax benefits until the end of this year," and added, "To ensure the successful establishment of the CR REITs system, the application period should be extended until the end of 2026."

According to the government’s proposed amendments, if a CR REIT acquires unsold housing units in non-metropolitan areas between January and December of this year, additional capital gains tax will not be imposed. Furthermore, the amendment to the Comprehensive Real Estate Holding Tax Act allows single-home owners to avoid higher tax rates if they acquire unsold units in non-metropolitan areas below a certain size. However, the special provision that exempts CR REITs from being subject to the comprehensive real estate holding tax aggregation will expire at the end of this year.

The association argued, "With the imbalance in regional real estate markets worsening, the sunset date for the special tax benefits should be postponed to enhance the effectiveness of the system." In fact, the number of unsold homes after completion has increased 3.6 times over the past five years, reaching 27,057 units as of July this year. Of these, 22,589 units, or 83.5%, are concentrated in non-metropolitan areas.

The special provision exempting CR REITs from the comprehensive real estate holding tax aggregation for unsold units in non-metropolitan areas has been in effect since March 28. However, due to the time required to launch these REITs, only four cases, covering 991 units, have been registered so far. The association said, "There is significant feedback from the industry that it is difficult to complete purchases by the end of this year," and emphasized, "The extension until the end of 2026 is necessary to achieve the policy objectives."

There is a similar sentiment within the government. The Ministry of the Interior and Safety announced in last month's "2025 Local Tax Reform Plan" that it would extend the exemption from higher acquisition tax rates for CR REITs acquiring unsold homes in non-metropolitan areas until the end of 2026.

The association said, "The special tax benefits for corporate tax and comprehensive real estate holding tax should be aligned with the same deadline to be effective," and added, "If CR REITs purchase unsold units, it can revitalize the regional construction market with private capital while minimizing the burden on government finances."