South Korea’s government has abandoned a plan to reduce the basic comprehensive real-estate tax deduction for people who own one home but do not live in it. The deduction will remain at 1.2 billion won rather than falling to 900 million won, reversing a change announced 29 days earlier. The government also decided to keep the existing 150 percent cap on year-to-year property-tax burden increases.
The reversal changes the immediate tax outlook for affected single-home owners. Under the August proposal, non-resident owners would have faced a lower deduction as part of a stronger policy distinction between people living in their only home and those holding it without residence. Reporting from Maeil Shinmun and Kyunghyang says the government stepped back from that approach after sustained opposition, restoring the current deduction before the tax bills reached the National Assembly.
The episode highlights a tension in housing-tax policy. A lower deduction would have reinforced the government’s stated preference for owner-occupiers and increased the tax burden on non-resident owners. Keeping the current threshold limits that increase and gives taxpayers more continuity, but it weakens the original attempt to use the tax code to distinguish more sharply between residence and ownership. The 150 percent burden cap staying unchanged further reduces the size of the planned tightening.
The revised package is not yet the final law. Maeil Shinmun reported that 11 tax-law amendment bills, including the relevant comprehensive real-estate tax changes, are due to be submitted to the National Assembly on September 3. Parliamentary review can still alter the details. Owners and tax advisers will therefore be watching the bill text and legislative debate for confirmation that the restored 1.2 billion won deduction and existing burden cap survive intact.