![A summary notice of the 2026 tax reform proposal posted at a real estate agency in Gangnam, Seoul, on Wednesday. [Yonhap]](https://wimg.heraldcorp.com/news/cms/2026/08/05/rcv.YNA.20260805.PYH2026080509440001300_P1.jpg)
Academics have raised concerns that the government's proposed real estate tax overhaul lacks clear objectives and could infringe on people's freedom to choose where they live.
The Korean Association of Public Finance held an expert forum Wednesday at the Korea Chamber of Commerce and Industry in Seoul to assess the 2026 tax reform proposal that the Ministry of Economy and Finance announced Monday.
Participants questioned the government's claim that the overhaul promotes equitable taxation and normalizes the tax system.
Shim Hye-jeong, a former tax analysis review official at the National Assembly Budget Office, said the government must be clearer about what it is trying to achieve. "The government cites equitable taxation, but it needs to clarify what level of property holding tax is actually fair," she said. "It also needs to make clear whether the policy goal is redistribution of income and wealth, or whether it also includes price stabilization."
Kim Woo-cheol, president of the Korean Association of Public Finance and a professor of taxation at the University of Seoul, who moderated the forum, said the proposal appeared skewed. "The government calls it a tax reform for fair taxation, but isn't this too one-sided a judgment — enough to leave many people bewildered?" he said.
Concerns were also raised that the overhaul could deepen the existing housing supply shortage.
Seong Myeong-jae, a professor of economics at Hongik University, said the reform was addressing the wrong problem. "The cause of rising housing prices lies in a supply shortage, yet the direction taken is to suppress demand — which ends up reducing supply further," he said. "It is a shame that the focus on property taxation has left other fundamental reforms, such as income tax, unaddressed."
Song Heon-jae, a professor of economics at the University of Seoul, warned the overhaul could hamper labor market efficiency. "Allowing active mobility in the labor market is the direction that enhances economic efficiency," he said. "Pursuing fair taxation could end up restricting residential mobility and reducing labor market efficiency."
Participants also warned that a contraction in rental housing supply could undermine housing security for those who do not own homes.
"If the rate of owner-occupied housing stands at around 55 percent, that means the remaining 45 percent are living in homes owned by someone else," Seong said. "If all housing is steered toward owner-occupancy only, there may not be enough rental housing to supply to those without homes."
He added that the long-term special deduction for property holding had historically served a purpose beyond rewarding owner-occupants. "Allowing the long-term holding special deduction was also intended to encourage landlords to supply jeonse and monthly rent housing over the long term, even if they did not live there themselves," he said. "Eliminating the holding deduction and favoring only owner-occupants may protect those who live in their own homes, but the side effects — a drop in rental supply — will fall on tenants."
Seong said higher property tax burdens would not be enough to contain prices over the long run. "Raising the property tax burden may cause a one-time adjustment in housing prices, but it cannot prevent future price increases," he said. "Trying to reduce housing demand through tax burdens alone, without fundamentally resolving the supply problem, will not be effective."
Jeong Da-un, a research fellow at the Korea Institute of Public Finance, said the government's framing of the reform as fair taxation was creating confusion. "The government claims it is fair taxation, but it is not clear in what sense it is fair, and that is causing considerable confusion," she said. "The impact on tenants is real."
She also questioned whether the overhaul adequately distinguished among different types of multi-home owners. "Among multi-home owners, many do have speculative intent, but many others are in the rental business," she said. "What concerns me going forward is whether this reform was built on the blanket assumption that all multi-home ownership is speculation, without reflecting the diversity within that group."
The forum also heard criticism of proposed tax changes targeting the practice of deliberately suppressing share prices to reduce inheritance and gift tax liabilities. Participants said it was unreasonable to suspect tax avoidance intent based solely on a low price-to-book ratio or a sharp drop in share price following certain corporate actions.
hope@heraldcorp.com
