President Lee Jae-myung's repeatedly promised "expansion of the basic inheritance tax deduction" was not included in the "2026 tax reform plan" the government recently released. The government said real estate taxation takes priority and inheritance tax reform needs additional discussion. As a result, some say, "The government is not keeping its promise to raise the inheritance tax deduction while increasing holding taxes through the tax overhaul."
◇ Lee: "Telling bereaved families to sell their home and leave is cruel...deduction 1 billion won → 1.8 billion won"
Currently, the inheritance tax offers a blanket deduction of 1 billion won available to anyone, and a minimum spousal deduction of 1 billion won. This standard has remained unchanged for 30 years since 1997. As dwelling prices rose, more people came to inherit apartments worth 2 billion to 3 billion won, prompting criticism that the inheritance tax burden has become excessive.
During the last presidential race, President Lee Jae-myung also said he would raise the blanket inheritance tax deduction from the current 1 billion won to 1.6 billion won and the minimum spousal deduction limit from 1 billion won to 2 billion won. If so, the deductible amount could expand from 2 billion won to 3.6 billion won.
At a news conference marking 100 days in office last September, Lee also said about the "expansion of the basic inheritance tax deduction," "I said it, so I must keep it." He also explained, "It is excessively cruel to force a family to sell their home and move out because they cannot afford the inheritance tax," and, "The intent is to allow heirs to keep living there as long as the value does not exceed the price of an average apartment in Seoul."
◇ Government: "A comprehensive review and social discussion are needed, including a shift to an inheritance acquisition tax"
Even so, the "expansion of the basic inheritance tax deduction," which President Lee Jae-myung repeatedly mentioned, was not included in the 2026 tax reform plan the Ministry of Economy and Finance released on the 3rd.
A Ministry of Economy and Finance tax official said, "There are many issues, such as real estate, that must be handled first." The official added, "To revise the inheritance tax deduction limit, a comprehensive review of the entire inheritance tax system, including whether to shift to an inheritance acquisition tax, is needed, and social discussion is also necessary."
Accordingly, some expect that expanding the basic inheritance tax deduction will be difficult to introduce in the short term. A tax accountant said, "Expanding the inheritance tax deduction reduces taxes on the wealthy, which may not align with the government's trend of strengthening real estate taxation."
Currently, the inheritance tax uses an "estate tax" method that levies tax based on the total inherited estate. An "inheritance acquisition tax" would have each bereaved family member pay tax individually according to the actual amount inherited.
Before taking office, the current administration released a statement saying, "We will shift the inheritance tax structure from an estate tax to an inheritance acquisition tax and also raise the deduction limits for spouses and children." However, discussion has not progressed since the administration took office.
According to the National Tax Service, as of 2025, 22,524 people paid inheritance tax, and their inherited estate totaled 48 trillion won. By amount inherited, the largest group was those who inherited 2 billion won or less, at 9,443 people.