How South Korea’s tax overhaul could exacerbate sky-high real estate prices



Analysis How South Korea’s tax overhaul could exacerbate sky-high real estate prices First major tax change in decades risks increasing housing inequality and economic volatility by cutting inheritance tax John LeeAugust 7, 2024 SHARE COPY LINK FACEBOOK X LINKEDIN MASTODON An illustration of a house on top of a pile of coins in front of the South Korean flag \| Image: Korea Pro South Korea’s finance ministry announced significant revisions to the country’s tax laws on July 25, marking the first major overhaul in 24 years, including substantial reforms to the inheritance and gift tax system. These adjustments, set to take effect in 2025, aim to modernize the tax framework to reflect current economic realities and reduce the burden on taxpayers. However, the reduction in inheritance and gift taxes could have far-reaching implications for the economy, potentially fueling real estate investment that will exacerbate housing inequality and trigger market corrections. OVERVIEW OF TAX ADJUSTMENTS One of the key adjustments in the South Korean © Korea Risk Group. All rights reserved. No part of this content may be reproduced, distributed, or used for commercial purposes without prior written permission from Korea Risk Group. LATEST ANALYSIS 01Lee Jae Myung’s ‘pacemaker’ strategy tests South Korea’s leverage with Trump 02Trump’s Korea investment victory lap masks safeguards Seoul still controls 03North Korean POW dispute tests Seoul-Kyiv trust and future Ukraine policy 04South Korea’s CPTPP push exposes the cost of turning trade gains into consensus 05AI storage boom gives South Korea battery makers an EV overcapacity lifeline 06South Korea’s Mexico strategy runs into the hard limits of USMCA politics 07Preschool test ban forces South Korea’s English hagwons to rethink placement 08Lee Jae Myung’s Wall Street pitch tests South Korea’s capital market credibility

Analysis

How South Korea’s tax overhaul could exacerbate sky-high real estate prices

First major tax change in decades risks increasing housing inequality and economic volatility by cutting inheritance tax

John LeeAugust 7, 2024

How South Korea’s tax overhaul could exacerbate sky-high real estate prices

An illustration of a house on top of a pile of coins in front of the South Korean flag | Image: Korea Pro

South Korea’s finance ministry announced significant revisions to the country’s tax laws on July 25, marking the first major overhaul in 24 years, including substantial reforms to the inheritance and gift tax system.

These adjustments, set to take effect in 2025, aim to modernize the tax framework to reflect current economic realities and reduce the burden on taxpayers.

However, the reduction in inheritance and gift taxes could have far-reaching implications for the economy, potentially fueling real estate investment that will exacerbate housing inequality and trigger market corrections.

OVERVIEW OF TAX ADJUSTMENTS

One of the key adjustments in the South Korean

How South Korea’s tax overhaul could exacerbate sky-high real estate prices

LATEST ANALYSIS

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John Lee