Prime Minister Han Seong-sook speaks at the National Forum on Real Estate Policy held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, on Monday. [Yonhap]
Prime Minister Han Seong-sook speaks at the National Forum on Real Estate Policy held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, on Monday. [Yonhap]

Real estate experts on Monday proposed keeping the comprehensive real estate tax and capital gains tax burden on owner-occupied single homes at current levels while setting deduction caps for ultra-high-value properties, at a national real estate policy forum chaired by Prime Minister Han Seong-sook.

Kim Seong-hun, a professor in the department of public policy at Hanyang University, presented the tax reform session at the forum held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, outlining proposed directions for restructuring the comprehensive real estate tax and capital gains tax based on earlier discussions.

On the comprehensive real estate tax, Kim said the burden on owner-occupied single homes below a certain value should be maintained at current levels or eased, while deduction caps could be introduced for ultra-high-value owner-occupied homes. "However, it is important to reach a social consensus through extensive discussion on what constitutes an ultra-high-value property," he said.

He also proposed converting tax credits for non-resident single homeowners from an ownership-based deduction to a residency-based one, and said the basic deduction, fair market value ratio and tax rates for multi-homeowners could be adjusted. He further suggested easing the conditions for deferring tax payments on owner-occupied single homes held by elderly residents.

On capital gains tax reform, he said the long-term holding special deduction for owner-occupied single homes should be kept at current levels, while the deduction should be restructured to center on residency, normalizing the tax burden on non-resident properties. He added that even for owner-occupied single homes, a cap on the long-term holding special deduction could apply to ultra-high-value properties with large capital gains, and that temporary incentives could be considered for retired elderly residents who relocate to regional areas.

He added that the potential pass-through of the tax burden to tenants and the intended use of comprehensive real estate tax revenue were also issues worth discussing going forward.

Kim Yeong-do, a senior research fellow at the Korea Institute of Finance who presented on housing finance, raised the expansion of policy mortgage support and broader loan access for young people as measures to better accommodate younger buyers.

However, he said challenges remain, including how to screen genuine end-user demand among young buyers and whether to prioritize rental demand or purchase demand.

He said a gradual reduction plan was needed to address the misuse of jeonse loans for unintended purposes, but noted that the policy effect would vary depending on the approach — whether through reduced guarantees or annual reduction targets. He added that relocation loans also carry unresolved technical issues, including their impact on redevelopment projects.

Jin Mi-yun, a professor at Myongji University's graduate school of real estate who presented on housing supply, proposed that the government invest more selectively and intensively in areas that urgently need redevelopment but have been unable to move forward due to insufficient project viability.

She also called for additional support for non-apartment housing suppliers, including financial assistance and extended special exemptions that exclude such units from household counts to ease the tax burden, as well as streamlined administrative procedures such as one-stop support services.

On rental housing supply, she said cultivating intermediate private rental operators would help stabilize the rental market.


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