In recent discussions, South Korean President Lee Jae-myung has been vocal about the need to reform the real estate tax system, with a specific focus on encouraging multiple homeowners to release their properties onto the market. As these discussions unfold, there is a palpable expectation that changes could lead to an increase in housing supply. The reforms target existing restrictions that have previously stifled inventory, aiming to eliminate barriers that have caused homeowners to hold onto their properties rather than sell.

One of the pivotal aspects of the reform process is the resumption of the 'capital gains tax surcharge for multiple homeowners' on May 9. This tax, introduced under the previous Moon Jae-in administration to alleviate the burden on single-homeowners, was suspended during President Yoon Seok-youl's government, leading many multiple homeowners to opt for retention rather than selling. President Lee emphasized the importance of removing unfair benefits derived from market distortions. He further pointed out the necessity to revise benefits linked to registered rental properties that have contributed to the ‘lock-up’ of high-value apartments in Seoul.

The proposed amendment includes setting a sunset clause on tax exemptions for multiple homeowners who participate in rental housing schemes. By addressing these loopholes, President Lee aims to drive an influx of properties into the market. Experts suggest that these measures could significantly impact those with two or more sought-after properties, highlighting the potential of these reforms to enhance market liquidity and meet housing demand in South Korea.