Koo Yoonchul: Temporary Suspension of Heavy Capital Gains Tax on Multi-Homeowners to End on May 9 (Comprehensive)

Heavy Tax Suspension Applies to Newly Regulated Areas
If Balance Payment or Registration Is Completed Within Six Months After Contract

The government has reaffirmed its policy to end, as scheduled, the temporary suspension of the heavy capital gains tax on multi-homeowners, which is set to expire on May 9. However, to reduce confusion in the market, it has decided to introduce temporary transitional rules based on the date of contract.

Deputy Prime Minister and Minister of Economy and Finance Koo Yoonchul said at a Cabinet meeting held at the Blue House on February 3, chaired by President Lee Jaemyung, that "to restore policy credibility and normalize the market, we plan to terminate the temporary suspension of the heavy capital gains tax on multi-homeowners."

According to the government plan, only transactions for which a sales contract is signed by May 9 will be partially eligible for the temporary relief. In the existing regulated areas of the three Gangnam districts and Yongsan District, the sale will qualify for the suspension of the heavier tax if the remaining balance is paid or the registration is completed within three months from the contract date. In areas newly designated as regulated on October 15 last year, the deadline is extended further, and the relief will apply if the remaining balance is paid or the registration is completed within six months.

Deputy Prime Minister Koo explained, "In principle, the remaining balance must be paid by May 9, but in light of the tight timeline, we will help the market adjust by granting a certain period based on the contract date."

Koo Yooncheol, Deputy Prime Minister, speaks at Cabinet meeting

(Seoul=Yonhap News) Reporter Kim Dohoon = Koo Yooncheol, Deputy Prime Minister and Minister of Economy and Finance, is speaking at a Cabinet meeting held at the Blue House on Feb. 3, 2026. superdoo82@yna.co.kr (End)

Under the current system, when an owner of three or more homes in a regulated area sells a property, the basic maximum capital gains tax rate of 45% is applied, plus an additional 30 percentage points as a heavier tax rate, and on top of that, local income tax equal to 10% of the capital gains tax, resulting in a maximum tax burden of 82.5%. Previously, the Yoon Sukyeol administration temporarily excluded this heavier taxation starting from May 9, 2022, to stabilize the real estate market and encourage more properties to be put up for sale.

The government also plans to manage the market in parallel with ending the suspension. Deputy Prime Minister Koo asked the relevant ministries to strengthen crackdowns on abnormal transactions, such as illegal or de facto land transfers and disguised gifts, and to improve the land transaction permit system, stressing that "this may in effect be the last opportunity to avoid the heavier taxation."

Regarding the handling of homes currently occupied by tenants, he stated, "We will exceptionally recognize the current tenant’s lease term, but afterward, the property should be used for actual residence." As for criticism that the criteria for the suspension of the heavier tax should reflect the fact that, under the land transaction permit system, up to four months are allowed between the granting of the permit and payment of the remaining balance, he said, "We will listen sufficiently to opinions and review whether adjustments are needed."

(Seoul=Yonhap News) Choi Jaegu = On Jan. 29, the government, after holding a ministers' meeting to promote housing supply presided over by Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol, announced the "Measures to Expand and Accelerate Urban Housing Supply." The photo shows the site of the Yongsan International Business District in Seoul, where the planned supply will increase by 4,000 units from 6,000 to 10,000. 2026.1.29 Photo by Choi Jaegu jjaeck9@yna.co.kr (end)