South Korea's cabinet on Tuesday approved a revised decree reinstating heavy capital gains taxes on multi-property owners starting May 9, ending a four-year moratorium on the punitive levy.
Under the amended Income Tax Act enforcement decree, owners of multiple homes in designated speculation zones will face tax rates of up to 75% on capital gains—or 82.5% including local taxes—when selling properties from May 9.
To cushion market impact, the government will grant exemptions to sellers who sign contracts and pay deposits by May 9, even if final payments come later. Properties in existing speculation zones including Seoul's Gangnam, Seocho, Songpa and Yongsan districts must complete final payment and ownership transfer within four months of contract signing. Areas designated as speculation zones after October 15 last year have six months to complete transactions.
The government will also temporarily ease residency requirements for buyers purchasing multi-home owners' properties with existing tenants in land transaction permit zones. Current rules require buyers to move in within four months of permit approval, but buyers of tenant-occupied properties may defer residency until the lease expires—up to February 11, 2028.
The cabinet also extended temporary fuel tax cuts for two additional months through April. The measure maintains price reductions of 57 won per liter for gasoline, 58 won for diesel and 20 won for LPG butane compared to pre-cut rates.
Additional revisions expand tax exemptions for dog farm operators shutting down businesses, raising the threshold from 400 to 500 dogs. The decree also clarifies rules on religious organizations qualifying as public interest corporations and refines calculation methods for long-term holding deductions on rental housing.
The revised decrees take effect upon promulgation on February 27.