The government unveiled its 2026 tax revision plan on August 3, and the housing-related changes are sending shockwaves through the market. In broad terms, the plan preserves and strengthens tax benefits for homes their owners actually live in while scaling back breaks for high-priced properties, homes the owner does not occupy and multiple-home owners. The direction reflects the government's intent to reshape the housing market around owner-occupancy rather than property holding.
The most notable element is the phased reduction and eventual elimination of tax benefits for registered rental operators who own multiple homes, along with the gradual removal of capital gains tax relief long attached to newly built homes and unsold homes acquired in earlier years. Multiple-home owners who fail to dispose of surplus registered rental units within the set deadlines will face heavier tax bills. Below is a closer look at what the plan contains on the narrowing and abolition of capital gains tax relief for registered rental homes and similar categories.
The plan takes aim at a long-standing carve-out under which registered rental apartments in designated adjustment zones were exempt from the heavier capital gains tax rates applied to multiple-home owners, with no time limit, and also qualified for a preferential 50% special long-term holding deduction. Under the new plan, registered rental apartments whose mandatory rental period ends and whose registration is automatically canceled by December 31, 2026 must be sold by December 31, 2027 to keep the exemption from the heavier rates and the current 50% preferential deduction.
If such an apartment is sold in 2028, only half of the heavier capital gains tax rate for multiple-home owners will apply — an additional 10 or 15 percentage points — and the special long-term holding deduction will be cut to 30%. If it is sold in 2029 or later, the full heavier capital gains tax rate will apply and no special long-term holding deduction will be granted. In effect, from 2029 the exemption for registered rental apartments in adjustment zones disappears entirely, and they will be taxed on the same basis as any other property held by a multiple-home owner.
There are exceptions where owners face constraints on selling. If a registered rental apartment is still within its mandatory rental period as of January 1, 2027, if its location is newly designated as an adjustment zone, or if it is undergoing rebuilding or district redevelopment, the pre-revision benefits still apply as long as the unit is sold within one year of the latest of the following dates: the end of the mandatory rental period, the date of the designation notice, or the date of the transfer notice.
If an owner misses that one-year window but sells within two years, half of the heavier rate will apply along with a 30% preferential special long-term holding deduction. Multiple-home owners holding registered rental apartments should therefore check these deadlines carefully to avoid a heavier tax burden.
The plan also sets expiration dates for reduction and special taxation schemes introduced in earlier periods to stimulate the property market for buyers of newly built homes and unsold homes. These cover units acquired between the late 1990s and the early 2000s under the Restriction of Special Taxation Act — long-term rental housing (Article 97), newly built rental housing (Article 97-2) and unsold housing (Article 98). Under the plan, apartments in the greater Seoul area must be sold by December 31, 2029 to retain the existing benefits, while other homes must be sold by December 31, 2031.
The government has also put a deadline on benefits for so-called win-win rental homes. Previously, owners who met the rent-level and rental-period requirements were exempt from the residency requirement regardless of when they sold. Under the plan, the two-year residency exemption will apply only to sales completed by December 31, 2027. Where a win-win lease contract is still in effect as of January 1, 2027, the same benefit applies if the home is sold by the earlier of one year after the contract ends or December 31, 2029.
None of this has yet been enacted, but the material comes from an official government announcement and the substance is unlikely to change significantly. Owners typically register apartments as rental businesses because the tax benefits available after the mandatory rental period allow them to book capital gains, even at the cost of charging rent below market levels.
Under the new plan, however, registered rental apartments in adjustment zones lose those tax benefits unless they are sold within the specified windows. Multiple-home owners holding such apartments would do well to study the plan in advance and work with a professional on a tax-planning strategy.
