This study examines the economic effects of South Korea’s capital gains tax reforms on housing, focusing on the lock-in effect ― a contraction in housing transactions following higher tax rates. In 2017, amid a prolonged housing boom, the government raised capital gains tax rates for multi-homeowners. Analysis of transaction volumes and prices around the announcement and implementation reveals a pre-reform surge in sales and gifts, followed by a post-reform decline. A temporary suspension of the tax in 2019 again triggered a short-term uptick in transactions during the grace period.

These findings suggest the tax policy failed to achieve its intended goal of stabilizing the housing market. The lock-in effect, compounded by low policy credibility, likely contributed to diminished public trust in housing policy. Moving forward, housing tax reforms should be anchored to fundamental taxation principles, prioritizing efficiency and equity while promoting system stability to ensure predictable obligations for taxpayers and bolster confidence in the housing market.

ABSTRACT
Preface
Summary (KOR)

Chapter 1. Introduction
　Section 1. Background and Rationale
　Section 2. Literature Review

Chapter 2. Capital Gains Tax and Housing Ownership
　Section 1. Capital Gains Tax
　Section 2. Housing Ownership and Multi-Homeowners
　Section 3. Capital Gains Tax and Housing Transactions

Chapter 3. Effects of Capital Gains Tax Regulations
　Section 1. Real Estate Registry Data
　Section 2. Effects of Temporary Suspension of Capital Gains Tax
　Section 3. Effects of Capital Gains Tax Increases
　Section 4. Conclusion

Chapter 4. Conclusion

References
Appendix