Families across South Korea, Japan and China are moving inheritance wealth out of property and into stocks, funds and insurance. In South Korea, brokerage Shinhan Securities reported a 272% year-on-year jump in accounts held by minors in the first quarter of 2026. The Kospi has risen roughly 103% this year, one of the best returns among G20 equity markets, while real estate still accounts for an estimated 65% of South Korean household assets.
The pace varies sharply by country, with China’s equity shift lagging far behind Korea’s. Beijing now requires state-owned insurers to put 30% of new premiums into A-shares.
Real estate makes up an estimated 70 to 80% of household wealth in China. That single figure explains why a generation of East Asian families staked their children’s future on bricks rather than balance sheets. It is also the number now under quiet revision.
For decades, an apartment was the inheritance plan. It carried status, security, and the near-certainty that prices would rise. That certainty has cracked. China’s new-home prices have fallen for 11 straight months through April 2026. Japan’s working-age population shrinks each year. Seoul apartments now yield barely 2% in rent. The asset that anchored intergenerational wealth has stopped behaving like a sure thing.
So families are doing something their parents rarely did. They are buying stocks for their children — and governments across the region are paying them to do it.
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The brokerage account is the new apartment
South Korea shows the shift at its sharpest. Choi Nam-joon, a 42-year-old office worker, has been gifting stock-market holdings to his son, treating it as a lesson in compounding and a more realistic route to wealth than buying property he cannot afford. He is not alone. The government underwrites the behaviour with a tax exemption covering investment funds gifted to minors, up to 20 million won every 10 years.
The most-traded stock in those minor accounts is Samsung Electronics. That detail matters: parents are not parking cash in index funds, they are handing children a stake in the country’s flagship exporter.
Japan is running the same experiment more slowly. The share of NISA accounts held by investors in their teens to their 30s climbed from 12.6% at the end of 2014 to 29.5% by the end of 2024. Tokyo pairs the scheme with a 1.1 million yen annual gift-tax exemption, aimed at what policymakers call old-to-old inheritance — wealth passing between elderly generations and never reaching the young.
China is the laggard, and the reason is in the long record. Wang Yi, chief investment officer at CSOP Asset Management, notes that equities have historically lagged property, which is why bricks remained the preferred vehicle for passing on wealth. Since 2024, sentiment has turned. “Diversification is becoming more common in China and is, in our view, both a natural trend and a necessary development,” Wang said.
| Country | Current approach | New policy | Effective |
|---|---|---|---|
| South Korea | Property-heavy savings | Tax exemption on funds gifted to minors, up to 20m won per decade | In force 2026 |
| Japan | Cash-heavy elderly holdings | Expanded NISA plus 1.1m yen annual gift-tax exemption | In force 2025 |
| China | Property as wealth store | State insurers must allocate 30% of new premiums to A-shares | From 2025 |
The incentives are documented. What is less clear is whether a tax break can rewire a financial culture built over two generations.
Ageing societies cannot bank on rising prices forever
The pivot is not a fashion. It is what happens when the property machine stops working. East Asian families bought apartments because prices climbed for 30 years, and a home doubled as both a pension and a gift to the next generation. That model assumed an endless flow of younger buyers. The demographics no longer deliver them.
The numbers tell the story Korea’s policymakers cannot say aloud. In a May 7 report, the Bank of Korea research team noted that “recent increases in household stock ownership, broader participation and higher expected returns suggest changing constraints on Korea’s wealth effect.” Read plainly: the central bank now expects stocks, not property, to drive how rich households feel.
The capital flows back this up. EPFR data show net inflows of roughly US$9–10 billion into dedicated Korea equity funds in the first five months of 2026, against continued outflows from China onshore equity funds. The split is the whole story. Korea’s shift is being funded; China’s is still being engineered from the top down.
So the apartment that once was the inheritance is becoming a line item next to the brokerage account. Whether Beijing can build a market households actually trust is the question that decides how far this goes — and that answer arrives one policy cycle at a time.
Beyond the headline
The bigger picture
The pivot from bricks to brokerage accounts reflects a deeper transition from an economy built on asset inflation to one that must generate returns from productivity and capital markets. As ageing societies can no longer count on perpetual property gains, policymakers are trying to re-engineer household balance sheets so equity risk-taking becomes a normal, even expected, part of middle-class financial life.
The money trail
Behind the rhetoric about financial literacy lies an enormous commercial opportunity. Domestic brokerages, insurers and global asset managers are racing to capture the first generation of Asian families that will build multi-asset portfolios rather than simply buy another apartment. Fee structures, product design and distribution are quietly reshaping to lock in these relationships long before the next inheritance event arrives.
The reach
For Western financial firms, this shift means future global capital flows will be driven less by sovereign wealth funds and more by millions of individual households allocating across borders. That alters who sets the marginal price for everything from US tech stocks to European bond ETFs. The preferences of a Korean or Japanese twenty-something investor now matter more to Western markets than in any previous cycle.
The decisions this shift forces, by who you are
With Korean inflows running hard and China’s policy timeline still open, three groups face concrete choices over the next six months.
- Western investors and fund allocators
The funded trade is Korea: large-cap tech and brokerage names benefiting from retail inflows and tax incentives. MSCI Korea has outperformed MSCI World by more than 20 percentage points year-to-date. Treat onshore China growth segments as higher-risk — watch for China Securities Regulatory Commission guidance, expected in the second half of 2026, before adding exposure.
- Western expats in the region
If you bank or invest locally, the tax interaction is the trap. In South Korea, understand withholding tax on dividends and how gifted Korean securities to children collide with home-country gift rules. In Japan, NISA’s tax-free status is usually not recognised by US or European authorities, so coordinate before opening one.
- Families planning cross-border inheritance
Inheriting Asian financial assets can mean dual compliance: local succession law plus home-country estate tax. US citizens holding Japanese or Korean securities must report overseas accounts above thresholds under FATCA and FBAR rules, even where the local jurisdiction levies no inheritance tax. Get cross-border tax advice before assets transfer, not after.
FAQ
How do parents open brokerage accounts for minors in Korea and Japan?
In South Korea, minors generally open brokerage accounts with a legal guardian’s consent. Parents must provide resident registration details and proof of relationship, and some firms require an in-person branch visit. In Japan, minors can hold NISA accounts, but a guardian must open the account at a financial institution, and switching NISA providers is restricted to once per year.
How are foreign residents’ investments taxed in Korea and Japan?
Foreign residents in Korea are generally subject to withholding tax on Korean-source dividends and interest, with some relief under tax treaties. Capital gains on listed shares may be exempt for smaller investors, but large-shareholding foreigners can face capital-gains tax. In Japan, residents are taxed at a flat 20.315% on capital gains and dividends from listed shares held outside NISA, withheld at source.
What reporting rules apply to cross-border inheritance of Asian assets?
Westerners inheriting Asian financial assets must often satisfy both local succession procedures and home-country estate or inheritance tax rules. US citizens inheriting Japanese or Korean securities must report overseas accounts above set thresholds under FATCA and FBAR regulations. They may owe US estate or income tax even where the local jurisdiction levies no inheritance tax on those specific assets.
Explainer
- NISA
- The Nippon Individual Savings Account, Japan’s tax-free investment scheme for residents, modelled loosely on the UK ISA. The government expanded it in 2024 to encourage households to move cash savings into stocks and funds. Crucially for foreigners, NISA requires resident status and is usually not recognised as tax-advantaged by US or European tax authorities, creating a reporting trap for expats.
- ChiNext
- A Shenzhen-listed board for high-growth and technology companies, China’s closest equivalent to the Nasdaq. It reached an all-time high of 4,038 points on May 13, 2026, reflecting the tech-driven sentiment shift that began in 2024. For families weighing equities over property, ChiNext’s volatility is exactly the risk that has kept Chinese inheritance planning tied to real estate.
- Shares in mainland Chinese companies listed in Shanghai and Shenzhen and priced in renminbi, historically restricted to domestic investors. From 2025, Beijing requires state-owned insurers to allocate 30% of new premiums to them, a deliberate push to deepen the onshore market. The policy is designed to build the trusted, stable equity market that households would need before shifting inheritance away from property.
