Luxury Tax Loophole: 100 Billion Won Apartment Avoids Tax, While Historic Bukchon Hanok Faces High Levy

A luxurious apartment in Seoul’s affluent Cheongdam-dong, valued over 100 billion won (approximately $75 million USD), has dodged the luxury tax due to a technicality. The PH129 apartment, with a floor area of 273.96 square meters, falls just short of the 274 square meter threshold for luxury home classification. Meanwhile, a traditional Korean hanok in Bukchon, dating back to 1938, has been categorized as luxury housing, despite its cultural significance and smaller size, and has faced a substantial tax bill. This discrepancy has sparked controversy over South Korea’s luxury tax system, with critics arguing that it is outdated and fails to reflect current housing realities. The recent tax court rulings on these two cases have highlighted the inconsistencies in the system, prompting calls for its reform.