According to Yonhap, South Korea unveiled a tax code revision plan that would reduce tax benefits for owners of high-value homes while offering incentives to companies that expand domestic production of key supply-chain items, including semiconductors, secondary batteries, solar and wind power equipment, key materials and components, AI robots and small modular reactors. The finance ministry said the package requires Cabinet and National Assembly approval, with Cabinet review set for Sept. 1 and submission to the National Assembly targeted for Sept. 3.

The revision would shift the comprehensive real estate holding tax from a home-count basis to one tied to the combined value of properties owned, and from 2028 the rate would be unified at 0.5 percent to 5 percent regardless of how many homes a taxpayer owns. For single-home owners who live in the property, the assessed-value threshold would rise from 1.2 billion won to 1.4 billion won, while the basic deduction for nonresident single-home owners would fall to 900 million won from 1.2 billion won.

The government also plans to cap the long-term capital gains tax deduction for home ownership at 2 billion won in 2028 and at 1 billion won from 2029, then base the deduction solely on residence starting in 2029. For homes valued below 3 billion won and owned for at least 10 years, the basic capital gains deduction would rise from 2.5 million won to 25 million won. South Korea also proposed temporary tax breaks for homeowners aged 65 or older who sell homes in the greater Seoul area and buy new ones outside the region, with deductions of up to 500 million won in 2027 and 300 million won in 2028.

The finance ministry said the revisions are projected to bring in an additional 3.44 trillion won in tax revenue from 2027 through 2031, mainly from higher comprehensive real estate tax receipts.