SEOUL, Aug 3 (Reuters) – South Korea proposed on Monday property tax adjustments aimed at imposing higher duties on wealthy homeowners, as policymakers strive to stabilise a red-hot housing market.
The announcement followed a closed-door meeting held by President Lee Jae Myung, in which the domestic stock and property markets were discussed, as the government tries to ease public anger over high house prices and a volatile stock market.
“We will reform real estate taxes in a reasonable manner to establish a residence-oriented housing market under the principle that a home is a place for living, not buying,” Finance Minister Koo Yun-cheol said.
Among various changes included in annual tax code revisions announced on Monday, the finance ministry proposed to raise property tax exemptions for those who own one house and reside in it, while lowering them for others.
It also proposed increases in real estate holding tax rates by as much as 2.3 percentage points, depending on house price, and other tax code changes raising the tax burden on multiple homeowners and expensive houses.
“For households that own one house, tax burden will decrease if their house is under 3 billion won ($2.1 million). From 3 billion won to 4 billion won, it will be raised in slices, and it will be more normalised for those between 4 billion to 5 billion,” Koo said.
Last month, Lee’s administration held a series of public discussion forums on property market policies, after house prices rose for the 13th straight month in June and by the most since November 2021.
Approval ratings for President Lee hit a one-month low of 51% in the latest survey by Gallup Korea on July 24, with housing market policy being the biggest reason cited for negative views for the first time since he took office in June 2025.
The Bank of Korea, also concerned about record earnings in the chip industry leading to high inflation and house prices, raised interest rates last month for the first time in three-and-a-half years and flagged more to come.
Among other tax code proposals, the ministry plans to introduce tax exemptions on domestic production for domestic sales, in sectors of solar energy, wind energy, rechargeable batteries, semiconductors, key materials and AI robots.
The ministry plans to submit the proposal to parliament by September 3.
($1 = 1,429.4000 won)
(Reporting by Jihoon Lee; Editing by Saad Sayeed)
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