[비즈한국] The government has released a comprehensive tax relief package aimed at regions experiencing population decline and unsold housing in non-capital areas to boost regional housing demand. The core of this initiative is to exclude homes in population-decline (or concern) areas from the count of properties when calculating capital gains tax and comprehensive real estate tax, and to exempt them from capital gains tax surcharges.
The Ministry of Economy and Finance announced on the 9th, as part of its ‘2026 Economic Growth Strategy,’ that it will implement a 3-way package to boost regional housing demand. First, homes in population-decline (concern) areas will be excluded from the housing count when calculating capital gains tax and comprehensive real estate tax, and will also be exempt from capital gains tax surcharges. Currently, if a person owns a home in such areas, it is counted just like a home in any other region, meaning the surcharge rules for multi-home owners still apply.
Currently, there are 89 regions in South Korea designated as population-decline areas and 18 as population-concern areas. The population-decline areas include 4 in the capital region (Ganghwa-gun and Ongjin-gun in Incheon; Gapyeong-gun and Yeoncheon-gun in Gyeonggi-do) and 85 in non-capital regions, while the population-concern areas include 3 in the capital region (Dong-gu in Incheon; Dongducheon-si and Pocheon-si in Gyeonggi-do) and 15 in non-capital regions. This deregulation for population-decline (concern) areas applies to homes with a standard market value of 900 million won or less in non-capital regions, and 400 million won or less in other designated regions.
In addition, the special provision that considers a single-home owner as a 'one household, one home' taxpayer even when purchasing an additional unsold home in a non-capital area after completion will be expanded. Previously, the 'one household, one home' special provision only applied if the unsold home in a non-capital region was valued at 600 million won or less; this threshold is being raised to 700 million won. This effectively creates an incentive for single-home owners to purchase homes in non-capital regions. 'One household, one home' owners benefit from tax exemptions on capital gains for homes sold under 1.2 billion won, favorable deductions on comprehensive real estate taxes, and tax credits for elderly owners and long-term holders.
Furthermore, to resolve unsold inventory in local regions, the government will extend tax support for Corporate Restructuring (CR) REITs by one year until next year and introduce a system where individuals who purchase regional housing can sell the property back to the REIT. CR REITs are indirect real estate investment products that use capital from private investors to purchase and lease out unsold homes, aiming to generate profit by selling them once the real estate market recovers. These REITs have previously received benefits such as exemption from acquisition tax surcharges, exclusion from comprehensive real estate tax calculations, and exemption from additional corporate capital gains taxes.
Unsold housing after construction, often referred to as 'stubborn inventory,' is on a sharp rise. According to the Ministry of Land, Infrastructure and Transport's report on unsold housing, there were 29,166 unsold homes after completion as of November last year, an increase of 10,522 units (56%) compared to the same month the previous year. While the capital region saw a modest increase of 509 units (13%) to 4,351, the non-capital regions saw an increase of 10,013 units (68%) to 24,815. The total number of unsold homes in Korea reached 68,794, an increase of 3,648 units (6%) over the same period. Currently, domestic unsold housing stands at 52,259 units in non-capital regions and 16,535 units in the capital region.