Distressed listings emerge near Banpo, Apgujeong as tax reform spooks multi-home owners

Since the government unveiled its 2026 tax reform package targeting high-value non-resident single-home owners and multi-home owners, distressed listings have begun appearing at select complexes in the Gangnam Three Districts — Gangnam-gu, Seocho-gu and Songpa-gu — and along the Han River belt. Some properties are priced hundreds of millions of won below market as owners rush to sell before the heavier tax burden kicks in. Among buyers, however, a wait-and-see mood prevails, with many saying they will hold off until next year — the grace period before the long-term holding deduction is restructured. Even when discounted listings do appear, asking prices still run into the billions of won, limiting the pool of buyers who can absorb them and leaving few deals to close.

Distressed listings have been emerging in some high-end residential areas since the 2026 tax reform package — outlining changes to the comprehensive real estate tax and capital gains tax — was announced Monday, according to the real estate industry.

The reform package includes five main measures: raising the fair market value ratio for the comprehensive real estate tax from 60 to 70 percent; adjusting the basic deduction threshold (1.4 billion won, or $987,000, for owner-occupants and 900 million won for non-residents); gradually abolishing the tiered tax rate based on the number of homes owned while raising the rate for the 600 million to 1.2 billion won tax base bracket; lifting the cap on annual tax burden increases from 150 to 200 percent; and restructuring the long-term holding deduction for single-home owners by eliminating the ownership requirement for the long-term residency income deduction. The package is designed to strengthen protections for owner-occupants while increasing the tax burden on non-residents and owners of ultra-high-priced homes. The restructured long-term holding deduction is expected to sharply raise capital gains tax on homes valued at 3 billion won or more, though the government plans to maintain the current rules through 2027 — effectively signaling that owners should sell by next year.

At Olympic Park Foreon in Gangdong-gu — widely regarded as the district's flagship complex — an 84-square-meter unit was listed Friday as a distressed sale at 2.85 billion won. The all-time high for that unit type was 3.3 billion won (October last year), and actual transaction prices in June came in at 3.13 billion won and 3.2 billion won, making the new listing more than 300 million won below recent sales.

The representative of real estate agency A said the owner, a two-home holder, wanted to take advantage of the window that had opened. "Tenant-occupied units can still be sold this year, so the owner decided now was the right time to exit," the representative said.

At Banpo Jae in Banpo-dong, Seocho-gu — which set an all-time high of 3.8 billion won last July — a 59-square-meter unit was listed Wednesday at 3.39 billion won. In Gaepo-dong, Gangnam-gu, an 84-square-meter unit at DiEH Firstier Ipark, the area's flagship complex, came to market at 3.4 billion won, more than 400 million won below its actual transaction price of 3.835 billion won recorded in April this year.

Ultra-high-end complexes with transaction prices above 5 billion won have also seen distressed listings emerge. A 100-square-meter unit at Hanyang 5-cha in Apgujeong-dong, Gangnam-gu, hit the market at 4.9 billion won the day after the tax reform package was announced — Tuesday — a discount of 300 million won from the all-time high of 5.2 billion won for that unit type.

As distressed listings continue to surface, the volume of listings in key Seoul districts has been rising compared with just before the tax reform announcement. According to Asil, a real estate big data platform, apartment sale listings in Seocho-gu stood at 8,078 as of Saturday, up 4.7 percent from 7,714 a week earlier. Gangnam-gu rose 2.6 percent (9,622 to 9,874) and Songpa-gu gained 0.5 percent (5,154 to 5,184), while Yongsan-gu climbed 2.6 percent over the same period, from 1,795 to 1,843. Han River belt districts also saw increases — Seongdong-gu (2,096 to 2,192), Dongjak-gu (1,664 to 1,725) and Mapo-gu (1,883 to 1,941).

Yet even as listings priced hundreds of millions of won below market emerge, actual contracts remain rare. While multi-home owners and holders of high-priced properties are busy recalculating their options, the combination of still-elevated prices and the time afforded by the grace period has intensified a standoff between sellers and buyers.

"Distressed listings are coming out, but buyers are in a 'let's wait and see a bit more' mood," the representative of real estate agency A said. "They think multi-home owners will keep putting properties on the market through next year, so they're watching from the sidelines. I expect sellers and buyers to remain at a standoff for some time."

Nam Hyeok-woo, a real estate researcher at Woori Bank, said the tax reform package would force owners of high-priced single homes to weigh the costs and benefits of selling, holding or gifting their properties, and that the number of owners in core Gangnam areas deliberating over their next move would grow. "However, since there is still some time before the toughened tax measures take full effect, a tug-of-war is likely to persist for a while — between sellers who are putting off immediate decisions and proceeding cautiously, and buyers who are watching the market and waiting for distressed listings," Nam said.