Public Opinion Surpasses 12,000 Amid Proposal to Raise Taxes on Ultra-High-Value Non-Resident Homes

As public dissatisfaction pours in over a government plan to increase taxes on those who own ultra-expensive homes or properties they do not live in, the number of submitted opinions surpassed 12,000 in just ten days. An analysis by KBS reporters of approximately 6,000 original public submissions reveals that opposition to the measure is overwhelming.

Following this, opinions opposing the change to base the long-term holding deduction for the Comprehensive Real Estate Holding Tax on the period of residence accounted for 5.4%. A similar number of opinions were received regarding the proposed increase in the fair market value ratio applied when calculating the taxable base; since an increase in the ratio leads to a heavier tax burden, the majority of these were also opposed. Opinions regarding raising the tax burden cap from 150% to 200% of the previous year's tax amount and revising the tax rate system for multi-homeowners followed.

There were continued calls citing that the requirements for exceptions were too narrow, along with appeals from the elderly regarding their tax burden. While the government recognizes exceptions for those who had to leave their homes due to unavoidable circumstances, all three conditions must be met: there must be an unavoidable reason, the person must have resided there for at least one year prior to the move, and they must move to a different city or county. Among the opinions mentioning specific reasons for non-residence, a significant number pointed out that the residency duration requirement was unrealistic. Dissatisfaction that the government's proposed exceptions were too narrow accounted for 25%, and there were also opinions demanding that various circumstances such as inter-floor noise, stalking, and commuting to special education schools be reflected. Woo Seok-jin, a professor of economics at Myongji University, stated, 'There is a significant amount of movement within Seoul, and considering that demand, it appears necessary to reflect unavoidable circumstances.'

Regarding the revision of capital gains tax, approximately 2,700 opinions were submitted. The government plans to abolish the Long-term Holding Special Deduction and convert it to a Long-term Residency Special Deduction, establishing a new deduction limit of 1 billion won starting in 2029. The intent is to prevent excessive benefits from going to ultra-high-value homes, and the largest number of opinions focused on this new limit. Critics argue that it is inequitable to reduce benefits for existing residents who simply lived in one house for a long time and saw its value rise. Woo Byeong-tak, a specialist at Shinhan Premier Pathfinder, analyzed, 'Taxpayers relied on and predicted the [long-term holding] system for a considerable time, but as the tax burden increased sharply over a relatively short period, the backlash was relatively greater.'

The demographic most affected by this reform plan was retired seniors. Among about 600 opinions related to the elderly, 4 out of 10 were appeals regarding the burden of paying taxes, citing a lack of ability to pay property taxes or issues with cash flow. Critics argued that while the government offers capital gains tax reductions for moving outside the metropolitan area, it is difficult to move from a home one has lived in their entire life, and living in the metropolitan area is often unavoidable for medical treatment. The Comprehensive Real Estate Holding Tax deferral system, which is only available to those below a certain income level and requires interest payments even when deferred, was noted to have limitations in resolving fundamental difficulties.

At the policy debate for the 2026 tax reform plan held on the 13th, experts also called for supplementary measures, such as relaxing the requirements for non-residence exceptions and maintaining some of the benefits for the holding period of the Long-term Holding Special Deduction. Commissioner Woo Byeong-tak added, 'Even if the direction of the current reform plan is correct, a longer grace period is necessary to ensure taxpayers can comply and agree.'