The government will raise the punitive income and corporate tax rate on non-business land to 20%. Non-business land refers to land that the owner holds for speculative purposes rather than using it for its original purpose. For business land, it must be used for its actual purpose for at least 60% of the total holding period.
The government on the 3rd announced the "2026 tax reform plan" containing these measures. It said there will be a one-year grace period, with full implementation slated for 2028.
The government plans to overhaul the tax system on non-business land to curb real estate speculation demand. Earlier, President Lee Jae-myung said at a Cabinet meeting, "We need to fix taxes, regulations, and finance for farmland as well," adding, "Farmland management in our country is a mess. It has become a target for speculation."
First, the income and corporate tax on non-business land will be raised from the current 10% to 20%. The application of the long-term holding special deduction for capital gains tax (up to 30%) on non-business land held by individuals will also be excluded.
In addition, the top comprehensive aggregate tax rate on land held regardless of production activity will be raised. If the combined taxable standard land value exceeds 4.5 billion won, the top rate will be increased from the current 3% to 4%.