There is an outlook that listings will increase, centered on the Gangnam area, due to a tax overhaul that raises the burden on owners of one high-priced or non-resident dwelling. To prevent a "lockup of listings," where multiple-home owners do not sell because of stronger capital gains taxes, the government also brought back a temporary easing of the capital gains surtax.
However, it is uncertain whether the increase in listings will lead to stabilization of real estate prices. Many experts said that while there could be steeply discounted urgent sales for high-priced apartments worth 3.5 billion won or more, which fall within the scope of the "pinpoint taxation," the decline in home prices below that range is unlikely to be large. With fewer jeonsei and monthly rental listings and continued pent-up demand in core areas, coupled with looser lending for end users, there was also a forecast that home prices could instead rise further.
There is also an outlook that the standard for a "smart single home" will shift to dwellings in the low 3 billion won range. Because dwellings around 3 billion won see taxes decrease under the tax overhaul, it suggests that tax-saving investment and end-user demand will concentrate in such dwellings.
◇ Outlook for long-held listings from "older adults and retirees"
According to the tax overhaul for 2026 released by the government on the 3rd, the basic deduction for the comprehensive real estate tax for single-household, single-dwelling owners was adjusted from the current 1.2 billion won to 1.4 billion won for residents and 900 million won for non-residents. The fair market value ratio was raised from 60% to 70%, and the cap on the comprehensive real estate tax burden was raised from 150% to 200%. As the fair market value ratio rises, the higher the home price, the more the tax base (the basis on which tax is levied) increases significantly. The tax credit of up to 50% depending on the holding period will be converted to a residence-period standard starting in 2028, and a tax credit cap (6 million won) was introduced.
Also, the long-term holding special deduction, which reduces the capital gains tax burden when selling a dwelling, was revamped to focus on residence. Currently, a single-household, single-dwelling owner who has held and lived in the property for 10 years or more receives deductions of up to 40% each on gains for holding period and residence period, for a total of 80%. Starting in 2029, the government will abolish the holding-period deduction entirely and limit the income deduction cap to 1 billion won.
With a higher holding tax burden on high-priced and non-resident dwellings, analysts say there is a high possibility that listings will emerge, centered on people in their 60s and 70s, older adults, and retirees. In particular, long-term holders of dwellings in core areas such as the three Gangnam districts with large capital gains, or non-residents with short residence periods, are likely to consider selling by next year. Song Seung-hyeon, head of Urban and Economy, said, "Dwellings owned by older adults and retirees who cannot bear the increased holding tax burden are likely to come to market first," adding, "The strengthening of holding taxes will act as a factor pressuring listings in key areas of the Gangnam region."
◇ "Real estate price stabilization effect likely to be limited"
However, the dominant view is that it is uncertain whether the increase in listings will lead to lower dwelling prices. Ko Jun-seok, a professor at Yonsei University's Sangnam Institute of Management, said, "Until next year, when the government leaves a 'way out' for multiple-home owners and rental business operators to dispose of dwellings, tax-saving listings could appear even in mid- to lower-tier areas of Seoul and non-regulated areas in the greater Seoul area. But with a sharp drop in jeonsei and monthly rental listings and continued buyer wait-and-see demand, it will be difficult to expect dwelling price stability."
Song said, "Because the market for dwellings priced at 1.5 billion won or less, where end users concentrate, is minimally affected by the tax overhaul, market instability may continue," adding, "If the government eases loan regulations for end users such as young adults, newlyweds, and first-time buyers, home prices in the second half are likely to rise further."
The government has also emphasized that this tax overhaul does not aim to stabilize real estate prices. Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, said at a full meeting of the National Assembly's Planning and Finance Committee last month regarding the tax overhaul, "The goal is not to stabilize real estate prices, but to follow the principle of ability-to-pay taxation (levying taxes according to a taxpayer's capacity)," adding, "We support dwellings that are lived in, and impose an appropriate burden on homes that are not lived in."
◇ Low-3-billion-won "tax-saving" smart single home emerges
Experts predicted that the preference for ultra-high-priced dwellings will ease further with this tax overhaul. Instead, they saw dwellings in the low 3 billion won range emerging as a new tax-saving "smart single home." According to the comprehensive real estate tax overhaul, for a single-household, single-dwelling resident, the comprehensive real estate tax burden increases compared with the current level from a market price of 3.5 billion won or more. For a 3 billion won dwelling, the amount paid as comprehensive real estate tax is 910,000 won now, but after the overhaul it will be 760,000 won, a decrease of 150,000 won. In contrast, for dwellings priced at 3.5 billion won, 4 billion won, and 7 billion won, the comprehensive real estate tax increases by 210,000 won, 630,000 won, and 23.58 million won, respectively.
Nam Hyuk-woo of Woori Bank's Real Estate Research Institute said, "We expect a psychological resistance line to form for dwellings in the tax base bracket where high tax rates begin to apply, over 600 million won (roughly a market price of about 3.2 billion won)," adding, "Among the three Gangnam districts, some areas such as Jamsil, Gaepo, and Yeoksam that fall under a tax base of 600 million won or less, as well as the Han River belt and popular areas in southern Gyeonggi, could newly stand out as tax-saving smart single homes, concentrating move-up demand."