On February 24, 2026, the South Korean cabinet approved amendments to the tax legislation that reintroduce higher capital gains tax rates for owners of multiple residential properties. The changes effectively restore a stricter tax regime that had been in place before 2022.

📑 The tax applies to profits generated from property sales. The main changes affect owners of two or more residential properties:
— owners of two properties are subject to an increased capital gains tax rate;
— owners of three or more properties face an additional surcharge;
— the total tax burden can reach up to 75% of the profit when selling properties located in designated speculative zones.

The key change is that the base capital gains tax, which can reach up to 45% depending on the profit level, will again be subject to additional surcharges: +20 percentage points for owners of two properties and +30 percentage points for owners of three or more.

📈 As a result, the maximum tax rate on capital gains can reach approximately 75%, and exceed 80% in certain cases when local taxes are included. These higher rates mainly apply in so-called speculative areas with rapid price growth and high investment activity, particularly in Seoul and its metropolitan region.

📅 The amendments will come into force on May 9, 2026 and will effectively end the temporary tax relief introduced in 2022. At that time, the government had reduced the tax burden for multiple-property owners in order to support the housing market and stimulate transactions during a period of economic uncertainty. These measures allowed investors to avoid higher tax rates and maintain profitability on resale.

Rising housing prices in major cities have been a key driver behind these changes. Over the past 10 years, property prices in Seoul have increased by approximately 167%, while income growth has lagged behind, leading to a sharp deterioration in housing affordability. The price-to-income ratio rose from around 6 to as high as 15, meaning that purchasing a home now requires up to 15 years of household income.

⚖️ According to the government’s approach, stricter taxation is expected to reduce investment-driven demand in the housing market and slow down price growth. This is primarily due to the fact that higher tax rates significantly reduce the profitability of selling second and subsequent properties, making such investments less attractive.

In the short term, authorities expect a temporary increase in supply, as owners of multiple properties may seek to sell before the new rules take effect.