Three Gangnam Districts in Panic as Tax Reform Reverted [Real Estate Tax Turmoil]

#. At a licensed real estate brokerage office in Gaepo-dong, Gangnam-gu, where residential complexes are densely concentrated, phones have been ringing nonstop since the government announced the final version of its tax reform plan on the 1st, restoring the deduction for nonresident single-home owners to 1.2 billion won. Many owners call to complain without hanging up once they get through, with each conversation lasting at least 30 minutes. Even after one call finally ends, another comes in, disrupting the agents' daily lives.
The callers are people who sold or transferred their homes as gifts after hearing the news on the 3rd of last month that the tax burden on nonresident single-home owners would increase, as well as those who had put their homes up for sale. Inquiries are especially numerous in the three Gangnam districts (Gangnam, Seocho and Songpa), where expensive and nonresident-owned homes are concentrated. Sellers are anxiously saying, "I can't undo it now—what am I supposed to do?" Those who have listed their homes are also voicing concerns such as, "Should I withdraw the listing even now?"
■ Flood of inquiries: "Can I cancel the sale?"
Confusion is growing in the market after the government recently reverted some policies in its finalized tax reform plan. The main focus is the decision to maintain the current basic deduction under the Comprehensive Real Estate Holding Tax for nonresident single-home owners. Those who sold their nonresident homes or signed sales contracts after trusting the government's position that "this time would be different" are now expressing regret.
According to the real estate and tax industries on the 2nd, complaints that people had "sold their homes for nothing" are emerging, particularly in the three Gangnam districts, where expensive homes are concentrated. A licensed real estate brokerage office near a large apartment complex in Daechi-dong, Gangnam-gu, also received inquiries that morning about whether a sale could be canceled. The property is currently undergoing an application under the land transaction permission system, and the seller changed their mind after the tax rules for nonresident single-home owners were restored. A local real estate agent explained, "Fortunately, the sale is still in progress," adding, "The seller and buyer still need to negotiate issues such as paying twice the contract deposit if the contract is canceled."
According to the Actual Transaction Price Disclosure System of the Ministry of Land, Infrastructure and Transport, 166 homes were traded in the three Gangnam districts over the past month alone. Since some transactions have not yet been reported, the total is expected to rise further.
■ Concerns voiced across the real estate and tax industries
The problem is that concerns remain on the ground that the tax reform plan could be revised yet again. A licensed real estate agent in Gangnam-gu pointed out, "Because the government keeps changing policies as easily as turning over the palm of its hand, neither buyers nor sellers know what to do. It is truly a chaotic situation."
Critics also say the overly complicated tax reform plan is producing unintended consequences. In fact, a multi-home owner in District A of Gangnam-gu mistakenly believed that the temporary easing of the heavy capital gains tax surcharge for multi-home owners in 2027–2028 had already taken effect and sold a home. The owner is now stuck paying the surcharge.
The tax industry has also continued to raise concerns. A senior official at a tax organization who requested anonymity criticized the policy, saying, "These side effects should have been considered when the policy was designed." The official added, "Even tax accountants say things like, 'I don't know whom this policy is for' when they meet."
[email protected] Kwon Jun-ho Reporter