Last year, among the 363,389 annual deaths, inheritance tax was levied on the families of 22,524 individuals. As recently as 2010, only about 1% of decedents were subject to inheritance tax; now that figure has expanded to 6.2%. This shift demonstrates how inheritance tax, once considered exclusive to the "1% asset holders," has become a tax burden on the middle class amid rising asset values.
The increased burden stems from the fact that the lump-sum deduction threshold for inheritance tax remains unchanged since its introduction in 1997. In Seoul, apartment transaction prices stood at approximately 6.6 million won per pyeong (about 34 pyeong under supply standards) just before the IMF foreign exchange crisis in 1997, totaling around 200 million won for a typical unit. Since the beginning of this year, however, average apartment transaction prices in Seoul have surged to approximately 1.6 billion won. Yet because the inheritance tax threshold has not been updated, ordinary office workers can no longer fully pass on even a single home they worked their entire lives to acquire to their children. Simulations show that when an owner of a 1.6 billion won apartment in northern Seoul dies without a spouse, their heirs must pay 267.72 million won in inheritance tax. If the family lacks sufficient cash and cannot secure loans, they may be forced to sell the property abruptly and leave their home. Such rushed real estate disposals often result in asset losses, compounded by additional taxes such as capital gains tax, leaving households with double or even triple financial burdens. This goes beyond mere economic hardship; it can also trigger housing insecurity.
The need for inheritance tax reform was acknowledged even by President Lee Jae-myung during his 100-day press conference, where he stated, "It is too cruel that people have to sell their homes and leave if they lack money." Yet subsequent discussions have stalled. This is because the debate remains trapped in an ideological frame of "tax cuts for the wealthy" rather than addressing it as a livelihood issue aimed at alleviating the burden on the middle class.
Even as society evolves, policies stuck to outdated standards can themselves become sources of further social harm. The fact that inheritance tax—originally introduced to mitigate wealth polarization—now threatens the middle class signals that the system has failed to keep pace with reality. A comprehensive overhaul is unavoidable. The government and National Assembly must urgently begin discussions on raising the inheritance tax deduction limit to reflect rising asset prices and changing economic conditions. Furthermore, they should proactively consider transitioning from the current estate tax model, which taxes the entire inherited estate, to a system that taxes only the actual assets received by heirs under an inheritance acquisition tax framework.
in OPINION
