The Return After 4 Years: Everything the 75% Multi-Home Capital Gains Tax Revival Starting May 9 Will Change in Korea's Real Estate Market
The multi-home capital gains tax surcharge, suspended for 4 years, will be reinstated starting May 9, 2026. Capital gains in regulated zones will be taxed at up to 75% (82.5% including local taxes), with a 4–6 month grace period available for contracts signed before May 9.
Should you sell now, or rush to close before May 9? The multi-home capital gains tax bomb that lay dormant for 4 years has entered a D-74 countdown.
TL;DR
- Income Tax Act enforcement decree amendment passed at Cabinet meeting on February 24, 2026
- From May 9, multi-home owners in regulated zones face a maximum surcharge of 75% (82.5% including local taxes) on capital gains
- A revival after ~4 years — the suspension introduced under the Yoon Suk-yeol government in May 2022 is being reinstated under the Lee Jae-myung administration
- Contracts signed before May 9 may qualify for a 4–6 month grace period depending on when the regulated zone was designated
- The 'last-train' mentality in real estate could drive a sharp spike in transactions between February and April
The Facts: What's Changing
On February 24, 2026, the government held a Cabinet meeting and passed the Income Tax Act enforcement decree amendment ending the suspension of the multi-home capital gains tax surcharge. The key points announced by the Ministry of Economy and Finance are as follows.
| Category | Current (Under Suspension) | From May 9 Onwards |
|---|---|---|
| 2-home owners (regulated zones) | Basic rate (6–45%) | Basic rate + 20%p surcharge |
| 3+ home owners (regulated zones) | Basic rate (6–45%) | Basic rate + 30%p surcharge (up to 75%) |
| Maximum rate incl. local taxes | 49.5% | 82.5% |
| Grace period criteria | — | 4–6 month grace for contracts signed before May 9 |
Ministry of Economy and Finance Tax Bureau Director Jo Man-hee: "Without exception, the capital gains tax surcharge will apply to all sales contracts concluded after May 9."
Why Now: The Three Drivers
This measure is the result of three converging factors.
① A Political Turning Point
In May 2022, the Yoon Suk-yeol government suspended the multi-home capital gains tax surcharge under the banner of normalizing real estate transactions. Since taking office in 2025, the Lee Jae-myung administration has signaled a reinstatement, citing the need to curb real estate speculation and restore tax equity. The passage of this enforcement decree formally establishes that policy direction.
② KOSPI Bull Run and Pressure to Reallocate Assets
With KOSPI hitting record highs and a growing trend of asset migration from real estate to equities, the government is hoping to reduce incentives for holding multiple properties and channel liquidity toward capital markets.
③ Expansion of Regulated Zone Designations
Since the second half of 2025, regulated zones have been re-expanded, particularly across the greater Seoul area and major regional cities. As a result, the number of multi-home owners subject to the surcharge is now broader than during the previous enforcement period.
Context: What Happened 4 Years Ago
The multi-home capital gains tax surcharge was originally introduced in 2021 to curb speculation, but it triggered a 'transaction cliff'. Sellers pulled listings off the market to avoid the tax, leading to a simultaneous supply shortage and price surge.
After the Yoon government suspended it in May 2022, transaction volumes rebounded, and prices rose again through 2023–2024, particularly in the greater Seoul area. This reinstatement signals the beginning of what critics are calling 'Act Two' of that same cycle.
Outlook: Scenarios After May 9
Scenario A — Last-Train Selling Rush (High Probability)
- Surge in listings in regulated zones in March–April → short-term price correction
- Supply dwindles after May 9 as listings are absorbed → potential price rebound in the second half of the year
Scenario B — Transaction Cliff Redux (Moderate Probability)
- If multi-home owners opt for gift transfers or rental conversion instead of selling, the listing shortage persists
- Rising jeonse (lease) demand could push both jeonse and monthly rent prices higher
Scenario C — Accelerated Capital Market Inflows (Partially Materializing)
- Funds from real estate gains flow into KOSPI and overseas ETFs
- Already intertwined with discussions about KOSPI crossing 6,000, expectations of increased stock market liquidity are growing
Checklist for Multi-Home Owners
References
Image Credits
- Seoul Apartment Complex Overview — Wikimedia Commons, CC BY-SA 3.0