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Even if you own only one home, your tax burden could increase. You could also lose a tax exemption simply because you sold your previous home later than the permitted deadline after purchasing a new one.

The recently announced 2026 real estate tax reform proposal includes changes that may directly affect property transactions. These include the disposal deadline for temporary two-home owners, tax benefits for rental housing, special rules for cooperative rental housing, and capital gains tax deductions for single-home owners.

This reform is not simply about whether taxes will rise or fall. The amount of tax you pay may vary significantly depending on when you buy, when you sell, and how long you have lived in the property. That is why checking the revised requirements before signing a contract is essential.

In this post, we will explain the key changes and practical precautions that home buyers and sellers should know, using clear language and easy-to-understand examples.

When a homeowner purchases a new home before selling the previous one, the household temporarily owns two homes. Under the current rule, the previous home generally must be sold within three years of acquiring the new home to qualify for the single-home capital gains tax exemption.

Under the 2026 tax reform proposal, this period would be shortened from three years to two years when both the previous and newly acquired homes are located in regulated areas.

For capital gains tax purposes, the revised rule is scheduled to apply when the previous home is sold on or after October 1, 2026. However, the former three-year rule is expected to remain applicable if the property or related right was acquired, or if a purchase contract was signed and the deposit was paid, on or before August 3, 2026.

The details may change during legislative review or the revision of the relevant enforcement decrees.

The 2026 tax reform proposal would gradually reduce tax benefits for certain rental apartments located in regulated areas. The main targets are four-year short-term and eight-year long-term rental apartments whose registrations were automatically canceled after the mandatory rental period ended.

In general, qualifying properties sold by December 31, 2027 may remain exempt from the higher capital gains tax rates. For sales made during 2028, half of the standard surcharge would apply: an additional 10 percentage points for two-home owners and 15 percentage points for owners of three or more homes.

During 2028, a reduced 30% long-term holding deduction would apply to capital gains generated during the rental period. From 2029, the full surcharge and the general deduction rules would apply in principle.

Special deadlines may apply when the mandatory rental period is still in progress as of January 1, 2027, the area is newly designated as a regulated area, or the property is involved in a reconstruction or redevelopment project.

The final requirements may change during the legislative and enforcement-decree revision process.

Korea's cooperative rental housing benefit allows qualifying homeowners to receive an exemption from the two-year residence requirement when they limit rent or deposit increases to no more than 5%.

Under the 2026 tax reform proposal, an additional deadline would be introduced. If the qualifying rental agreement ends on or before December 31, 2026, the home must be sold by December 31, 2027.

If the agreement ends on or after January 1, 2027, the home must be sold by the earlier of the following dates: one year after the rental agreement ends or December 31, 2029.

The existing requirements—including the minimum rental periods, the 5% rent-increase limit, and the contract period—must also be satisfied. A rental agreement inherited when purchasing the home generally does not qualify as the previous rental agreement.

The new sale-deadline requirement is scheduled to apply to homes sold on or after October 1, 2026. Final details may change during the enforcement-decree revision process.

Under the 2026 tax reform proposal, the annual capital gains basic deduction would increase from KRW 2.5 million to KRW 25 million for qualifying long-term resident homeowners.

To qualify, the seller must be a single-home household, have lived in the home for at least ten years, and sell the property for KRW 3 billion or less. The revised deduction is scheduled to apply to properties sold on or after January 1, 2027.

This is an income deduction, not a direct tax credit. It reduces the taxable capital gain before the tax rate is applied, so the actual tax savings will depend on the seller's taxable gain and applicable tax bracket.

The increased deduction would not apply to properties sold for more than KRW 3 billion, homes occupied for less than ten years, transactions between related parties, or sales by non-residents.

Final requirements may change during the legislative review process.

Under the 2026 tax reform proposal, homeowners who relocate for an unavoidable reason may count up to three years of non-occupancy as a residence period when calculating the long-term residence income deduction.

Qualifying reasons may include education, a job transfer or change of workplace, long-term medical treatment, transfer due to school violence, overseas study or employment, and moving in with a direct ascendant aged 60 or older to provide care.

The homeowner must generally have lived continuously in the home for at least one year before relocating and must move to another city or county. Supporting documents will be required to prove both the reason for and the actual relocation.

This rule applies only when calculating the deduction rate. It does not replace the two-year actual residence requirement for the single-home capital gains tax exemption on a home that was located in a regulated area when acquired.

The revised rule is scheduled to apply to homes sold on or after January 1, 2028. Final details may change during the legislative process.

• Temporary two-home ownership: The disposal period would be shortened from three years to two years when both homes are in regulated areas.
• Registered rental apartments: Capital gains tax benefits would be gradually reduced from 2027 through 2029.
• Cooperative rental housing: A new deadline for selling the home after the qualifying rental agreement ends would be introduced.
• Long-term resident homeowners: The annual basic deduction would rise from KRW 2.5 million to KRW 25 million for qualifying homeowners.
• Unavoidable relocation: Up to three years of non-occupancy may be recognized when calculating the residence-based deduction rate.

☐ Confirm the number of homes owned by all household members.

☐ Check whether the previous and new homes are in regulated areas.

☐ Calculate the deadline for selling the previous home.

☐ Keep proof of the contract date and deposit payment.

☐ Check the rental-business registration and automatic cancellation dates.

☐ Confirm the end date of the mandatory rental period.

☐ Calculate the sale deadline for cooperative rental housing.

☐ Verify the actual residence period using official records.

☐ Keep supporting documents for job transfers, education, or medical treatment.

☐ Compare the expected tax based on the planned closing and registration dates.

The 2026 real estate tax reform proposal generally expands certain benefits for long-term resident homeowners while reducing benefits for non-owner-occupied and registered rental properties.

Long-term resident single-home owners may qualify for a higher basic deduction. However, temporary two-home owners and registered rental-property owners will need to manage their sale deadlines more carefully.

The timing of the sale may become just as important as the sale price. Even a small change to the closing or registration date could affect tax exemptions, surcharge rates, and available deductions.

Since these measures are part of a tax reform proposal, the final requirements and effective dates may change during the legislative and enforcement-decree revision process.