The core of the "2026 Tax Reform Plan" announced by the Ministry of Economy and Finance on the 3rd is to minimize any increase in the property tax burden on owner-occupied single homeowners with homes valued at 4 billion won or less in market price, while sharply raising the burden on high-priced homes valued above 4 billion won. This is achieved by unifying the comprehensive real estate tax rate—which had been applied differently depending on the number of homes owned—based on home value, and by simultaneously raising the fair market value ratio, the tax rate on high-priced homes, and the tax deduction limit.
First, tax rates will be raised in stages. The tax rate for owners of one or two homes with a tax base of 600 million to 1.2 billion won will rise from the current 1.0% to 1.3% in 2027. For owner-occupied single homeowners, this bracket corresponds to a published price of approximately 2.26 billion to 3.11 billion won and a market price of approximately 3.22 billion to 4.45 billion won. As of last year, there were 59,905 comprehensive real estate tax payers with a tax base of 600 million to 1.2 billion won.
Starting in 2028, the distinction in tax rates based on the number of homes owned will be eliminated for the individual housing portion of the comprehensive real estate tax, and rates will be unified by home value. A tax base of 1.2 billion to 2.5 billion won will be taxed at 2%, 2.5 billion to 5 billion won at 3%, 5 billion to 9.4 billion won at 4%, and above 9.4 billion won at 5%. The current tax rate for owners of three or more homes will be applied to the bracket above a 1.2 billion won tax base.
The fair market value ratio, currently 60%, will be uniformly raised to 70% next year. For homeowners in areas subject to adjustment (excluding owner-occupied single homeowners) and owners of three or more homes, it will be raised to 80% in 2028. The basic deduction for multiple homeowners will also be reduced from the current 900 million won to a method of adding up to 500 million won to 400 million won depending on the proportion of the residence among the total home value. However, the basic deduction for owner-occupied single homeowners will be raised to 1.4 billion won.
An amount limit will also be newly established for tax deductions for the elderly and long-term holders. The combined deduction rate for age deductions and holding/residence deductions will be maintained at up to 80%, but the amount that can actually be deducted will be capped at 8 million won in 2027 and 6 million won from 2028 onward. The ceiling on the comprehensive real estate tax burden will also be raised from 150% to 200% of the equivalent total tax amount of the previous year. As a result, even if the tax amount surges due to tax reform or a rise in published prices, the tax amount after applying the burden ceiling can increase up to twice that of the previous year.
Accordingly, the comprehensive real estate tax on ultra-high-priced homes is expected to surge. For example, the comprehensive real estate tax on a 132-square-meter unit at Banpo Xi in Seoul (market price 6 billion won) will jump from the current 6.15 million won to 11.31 million won in 2027 and 17.43 million won from 2028 onward, while a home with a market price of 7 billion won will surge from 9.38 million won to 22.52 million won in 2027 and 32.96 million won from 2028 onward.
In contrast, the burden on a home with a market price of 2 billion won will actually decrease from 280,000 won to 110,000 won, and a home worth 3 billion won will drop from 910,000 won to 760,000 won. For a home with a market price of 4 billion won, the increase is relatively small, rising from 2.63 million won to 3.25 million won.
However, this is based on the assumption that this year's determined published prices will no longer rise, and if published prices are raised in the future, the tax burden is expected to jump along with them. Based on an analysis commissioned to tax accountant Kwak In-song, assuming that published prices in 2027 and 2028 rise each year by only half of the 2026 increase rate, the comprehensive real estate tax on an 84.60-square-meter unit at Mapo Raemian Prugio, with a market price in the mid-2 billion won range, increased from the current 270,000 won to 670,000 won in 2027 and 1.19 million won in 2028, assuming a 60-year-old homeowner held and resided in it for 10 years. The property tax including asset tax also increased from 4.22 million won to 6.7 million won. Under the same conditions, for a 131.48-square-meter unit at Apgujeong Hyundai Apartment, with a market price of around 7 billion won, the comprehensive real estate tax jumped about sevenfold from 8.47 million won to 24.84 million won in 2027 and 58.89 million won in 2028. The total property tax swelled 3.6-fold from 20.87 million won to 75.54 million won.
