[Edaily Reporter KIM EUN KYOUNG ] Less than a month after the government unveiled its real estate tax reform plan, discussions on revising key provisions have begun, further complicating the housing market landscape. With the possibility that the tax criteria for non-resident single-homeowners may change, homeowners are expected to postpone decisions on whether to sell, while buyers will wait to confirm the final tax structure, leading to a growing wait-and-see attitude.

According to government and political sources on the 24th, the Democratic Party of Korea and the government reached a consensus at a high-level party-government consultation meeting the previous day to expand the scope of recognition for single-homeowners who are unable to reside in their homes due to unavoidable circumstances. The Democratic Party strongly urged the government not to distinguish between resident and non-resident single-homeowners when applying the Comprehensive Real Estate Holding Tax.

The core of the tax reform plan announced by the government on the 3rd is to reorganize the real estate tax system around actual residency. However, just 20 days after the announcement, the ruling party demanded a review of the taxation criteria for non-resident single-home owners, forcing the market to recalculate its tax burden.

In the Gangnam area, where high-priced homes are concentrated, some homeowners are already reconsidering whether to sell. An official at a real estate agency in Gangnam District said, “Since the ruling party and government’s announcement, we’ve received inquiries from homeowners asking whether the tax system is changing again and whether they should withdraw their current listings,” adding, “In particular, elderly homeowners and those sensitive about their residency periods are frequently asking when the tax system will be finalized.”

Experts believe it is more likely that the government will adjust the policy by broadly recognizing unavoidable reasons for non-residence rather than completely eliminating the distinction for non-resident single-homeowners. This is because President Lee Jae-myung has repeatedly stated his position that tax benefits for homes held for investment rather than residential purposes should be reduced.

Ham Young-jin, head of the Real Estate Research Lab at Woori Bank, said, “Rather than signaling a complete elimination of the distinction between residents and non-residents, this appears to indicate a broader interpretation of the scope of non-residents who face unfair treatment or unavoidable circumstances.” He added, “It seems they will refine the specific criteria for what constitutes ‘residence,’ such as child-rearing, family care, or relocation to regional areas.”

Market confusion and a wait-and-see attitude are expected to intensify until the final plan is finalized. In particular, the Gangnam area, where price adjustments have recently emerged, is bound to be even more sensitive to the direction of tax policy. According to the Korea Real Estate Board, apartment prices in Gangnam and Seocho Districts turned downward starting in the second week of August and have fallen for two consecutive weeks through last week. In contrast, outlying areas of Seoul are continuing their upward trend, showing divergent market movements.

Lab Director Ham predicted, “Owners of a single high-priced home may or may not put their properties on the market, depending on how the long-term residency income deduction changes and how the basic exemption for the Comprehensive Real Estate Tax is determined for non-resident single-home owners,” adding, “It is highly likely they will adopt a wait-and-see approach until the final legislative outline is revealed.”

The ruling party and the government plan to finalize the outline of the revised tax reform bill before submitting it to the National Assembly. The tax reform bill is scheduled to pass through the Cabinet meeting on the 1st of next month and be submitted to the National Assembly on the 3rd; it is expected to undergo a full review by the Tax Subcommittee under the National Assembly’s Finance and Economy Committee in October or November.