The 'exemption from the capital gains tax' for multiple homeowners will be extended for another year until May 2026. With the introduction of 'short-term private rental housing' in June, which has a mandatory rental period of six years, tax support will be provided by excluding short-term rental properties with a certain publicly announced price from the capital gains tax, corporate tax surcharges, and the comprehensive real estate tax. All of these are measures aimed at revitalizing housing supply.
◇ easing burdens on multiple homeowners and short-term rental operators to revitalize housing supply
According to the '2024 amendment to the tax law follow-up enforcement decree' announced by the Ministry of Strategy and Finance on the 16th, the deadline for exempting capital gains tax surcharges on dwellings owned by multiple homeowners for more than two years in designated adjustment areas will be extended for another year until May 9 next year.
Under the current tax law, multiple homeowners must pay an additional burden of 20-30 percentage points on the basic tax rate when transferring real estate. With this extension, even if they sell dwellings in designated adjustment areas, only the basic tax rate (6-45%) will apply.
The scope of tax support for private rental housing will also be expanded. The short-term private rental housing that disappeared under the previous government will be revived as 'non-apartment housing with a mandatory rental period of six years' starting June 4. This will allow various tax supports previously applicable to long-term rental housing to also be applicable to such short-term rental housing, excluding them from capital gains tax and corporate tax surcharges, and exempting them from the comprehensive real estate tax.
However, the application criteria are limited to short-term rental housing with a publicly announced price of 600 million won or less for construction-type, and 400 million won for metropolitan areas and 200 million won for non-metropolitan areas for purchase-type. Regarding this, a Ministry of Strategy and Finance official noted, 'For short-term rental housing, there is a lower level of residential stability for tenants compared to long-term ones, so we set the criteria to apply at a relatively lower level.'
At the same time, the value requirement for exempting existing capital gains tax surcharges on construction-type long-term private rental housing (mandatory rental period of 10 years) will be raised from 600 million won to 900 million won.
◇ rationalization of tax standards when changing dwellings to commercial properties
The standards for how to tax buildings that have been changed from dwellings to commercial properties will also be reasonably adjusted. Until now, if one intended to transfer a dwelling that met the 'one household, one dwelling' condition after changing its use to commercial properties, they could not receive tax exemption benefits if it had already changed to a commercial property as of the 'transfer date.'
Thus, the standard for determining whether the transferor owns one dwelling will be adjusted from the transfer date to the 'date of the sales contract' to prevent such confusion. A Ministry of Strategy and Finance official explained, 'The seller wants to sell as a dwelling, and the buyer wants to purchase it as a commercial property; we're trying to accommodate both sides to facilitate housing transactions.'
Starting next year, homeowners of 'high-value dwellings' with a jeonse deposit exceeding 1.2 billion won will be subject to income taxation even if they are considered 'two-homeowners.' Previously, jeonse income tax was imposed starting from three homes. In consideration of fairness with the taxation of monthly rent income introduced two years ago, the law has been amended to apply income tax from two homeowners for high-value dwellings, and the criteria for 'high-value' has been specified this time. Imputed rent refers to the interest amount (3.5%) on 60% of the amount exceeding the deposit of 300 million won.
◇ no income tax reductions for employment in small and medium-sized enterprises
The government will also push for amendments to enforcement decrees to enhance tax transparency and equity. Starting next year, four industries will be added to the list of sectors that are required to issue cash receipts: souvenir, tourism craft and decorative retail, photo processing, fishing market operations, and other water recreation services.
The reward for reporting non-issuance or refusal to issue cash receipts, which had reached 500,000 won per case, has been reduced to 250,000 won. The annual limit per person has also been adjusted from 2 million won to 1 million won. This action considers the increasing cases of exploitation by small business owners due to simple errors.
Additionally, those employed in small and medium-sized enterprises will be excluded from tax support that provides a 70-90% income tax reduction for 3-5 years, specifically those in high-income or professional occupations, such as veterinary services, real estate rental, virtual asset trading and brokerage, and tariff business.
Furthermore, the government plans to change the differentiated tax rates for the special consumption tax on soft coal, which applies differently according to calorific value (49 won/kg for high-calorific coal, 46 won/kg for medium-calorific coal, and 43 won/kg for low-calorific coal), to a single rate of 46 won/kg. However, the currently envisaged implementation date (July 1) may be postponed considering the impact on the power generation industry.