As the government simultaneously strengthened property holding taxes and capital gains taxes on owners of high-priced dwellings, older adults and retirees with tight cash flow found themselves with no choice but to sell their homes in the greater Seoul area. As an alternative, the government said it would cut capital gains taxes by 50% if an older single-home owner moves to a non-capital region, but the creation of this special case drew reactions such as "If you can't pay the tax, sell your home and go to the provinces" and "It infringes on freedom of residence transfer."
◇ Anger spreads among older adults and retirees over tax reform plan
Backlash is spreading over the government's tax reform plan, centered on older adults and retirees who struggle to secure cash. What especially fueled their anger was the special capital gains tax reduction offered when moving to a non-capital region.
To encourage sales, the government prepared a special taxation plan that lowers capital gains taxes if an older single-home owner moves to a non-capital region. If a single-home owner aged 65 or older disposes of a greater Seoul-area dwellings in which they have lived for five years or more to a third party who is not a relative and relocates to a non-capital region, the capital gains tax will be reduced. If the greater Seoul-area dwellings is sold next year, a 50% reduction applies. The cap is up to 500 million won. Starting in 2028, a 30% reduction with a cap of 300 million won will apply. However, if the person purchases a greater Seoul-area dwellings again or makes a transfer back to the greater Seoul area within five years, the reduced amount will be clawed back.
This kind of special case is being interpreted as a signal to sell by 2028 if paying tens of millions of won in property tax each year is difficult. The backlash is significant. A person surnamed Kim in her 70s who owns a high-priced apartment in Gangnam said, "The taxes are burdensome, but the hospital I go to is in Seoul, and my friends and children are all in Seoul, so how can I move to the provinces," adding, "Even if I go to the provinces, it's not as if there is no expense to build a new base, so it's hard to consider selling my Seoul home right away."
Even stronger reactions appeared in online communities. Criticism such as "effectively driving older adults without the means to pay taxes to the provinces" and "infringing on freedom of residence transfer" was prevalent.
On X (formerly Twitter), a citizen wrote, "The arrogance of a policy that says 'we'll cut your taxes, so go to the provinces,'" adding, "Moving in old age is not a real estate transaction of simply selling an expensive apartment and switching to a cheaper one." The writer noted, "It means relocating one's entire network of the hospital and pharmacy one frequents, public transportation, children and friends, welfare centers and cultural facilities, and lifelong human relationships," and criticized, "Expecting that tax cuts will lead large numbers of older adults in the greater Seoul area to relocate to the provinces is out-of-touch, desk-bound administration."
Woo Byung-tak, a senior expert at Shinhan Premier Pass Finder, said, "Older adults who own high-priced dwellings will not consider moving to non-capital regions as an option," adding, "Most will likely 'switch in place' by downsizing and moving within the area where they have been living."