The heavier capital gains tax on multiple-home owners, suspended since 2022, has resumed. The capital gains tax surcharge is a system that applies a higher rate than the standard rate when a multiple-home owner sells a residence. It is designed to curb speculative demand driven by holding multiple homes. To stimulate property transactions, the government temporarily suspended the surcharge starting in May 2022. With that suspension now expired, it has been reapplied after four years.
For multiple-home owners who sell a home in a designated speculative zone, an additional rate is added to the base rate of 6 to 45 percent. Two-home owners face an extra 20 percentage points, and those holding three or more homes face an extra 30 percentage points. On top of this, the special long-term holding deduction—which deducts part of the capital gains on a home held for a long period—does not apply. When the capital gains tax surcharge applies, the top rate for a three-home owner can reach 82.5 percent, including local income tax.
So how much does the actual tax differ depending on whether the surcharge applies?
Suppose someone holds a home in Seoul for 10 years and then sells it, realizing a capital gain of 500 million won. If not subject to the surcharge, the base rate plus 10 years' worth of the special long-term holding deduction applies, resulting in a capital gains tax of about 146 million won. That figure includes local income tax. However, a two-home owner subject to the surcharge faces an additional 20 percentage points on the base rate and loses the special long-term holding deduction. In this case, the capital gains tax jumps to about 300 million won. For the same home sold, the tax difference comes to nearly 150 million won.
For a three-home owner, the burden grows even larger. With 30 percentage points added to the rate, the tax rises to about 355 million won. The larger the capital gain and the longer the holding period, the wider the gap in the tax burden depending on whether the surcharge applies. Whether the surcharge applies and the estimated tax amount can be gauged in advance through the National Tax Service's Hometax and Sontax "self-diagnosis for heavier taxation in designated speculative zones" and the capital gains tax simulation calculator.
That said, the surcharge does not immediately apply to all transactions at present. If a sales contract is signed by May 9 and the payment of the down payment can be proven, the surcharge suspension can apply even if the balance payment or registration takes place afterward. In this case, the fact that the down payment was actually paid must be provable through records such as bank transfers. Even if a contract could not be signed due to land transaction permit requirements, if a permit was applied for by May 9, the surcharge is suspended provided the transfer is completed within the set period following the permit and contract. This period is four months for existing designated speculative zones and six months for areas newly designated in October 2025.
So if you sell a home after May 10, when the capital gains tax surcharge revived, must you always pay more tax? Not necessarily. First, you must determine whether you are actually subject to the surcharge. There are two main points.
First, if the home you are selling is not in a designated speculative zone as of the balance-payment date or meets the requirements for tax exemption, there is no need to worry about the surcharge. The surcharge applies only to homes located in a designated speculative zone as of the transfer date. Currently, designated speculative zones include all of Seoul and parts of the southern Gyeonggi region. In other areas—for example, provincial homes—a multiple-home owner's transfer may not fall under the surcharge. Likewise, when the requirements for exemption are met, such as a temporary two-home situation, the surcharge is not an issue because the transfer is not subject to taxation in the first place.
Second, even a multiple-home owner holding a home in a designated speculative zone can avoid the surcharge if other homes held are excluded from the "count of homes subject to the surcharge." For example, a home inherited less than five years ago, a home with a standard market price of 300 million won or less located outside the Seoul metropolitan area, metropolitan cities, and special self-governing cities, and qualifying long-term registered rental homes may be excluded from the count of homes subject to the surcharge. On the other hand, one should note that while a sale right (bunyangkwon) or an association member's occupancy right is not itself a home, it can be included in the count of homes.
The rules governing which homes are excluded and which are included are complex, and the requirements are demanding. Adjusting the order or timing of home sales to avoid the surcharge is also worth reviewing. Which choice is advantageous varies greatly depending on the number of homes held, their location, the timing of acquisition, and the size of the capital gain.
In the end, even for the same home, the tax can vary significantly depending on when it was sold, where it is located, and what other homes are held. If the decision is difficult, it is advisable to seek help from a tax expert in advance and develop a selling strategy.
He is...
· Graduate of Korea University, School of Health Policy and Management
· Former, Tongyang Life Insurance Finance and Accounting Team
· Former tax accountant, YJ Tax Lounge
· Current representing tax accountant, Hamtax Tax Accounting
