Korean capital gains tax runs in five steps. But when a one-home household sells above KRW 1.2bn, a sixth appears — apportionment. That one step is why “over 1.2bn means a big bill” is wrong. Cross it and the tax stays at zero for a while.
1. KRW 1.2bn is not a cliff. Only the excess is taxed, at a ratio of (sale price − 1.2bn) ÷ sale price, which is near zero just above the line. On a home held and lived in for ten years, the tax stays at zero up to KRW 1,237.9m in the worked example.
2. The long-term holding deduction has two tables. A one-home household counts holding and residence separately, up to 40% each, 80% together. Everything else gets 2% a year to a maximum of 30%.
3. Local income tax of 10% always follows. A KRW 100m assessment is really 110m.
Enter the amounts and the periods, and every line appears in statutory order — gain, apportionment, holding deduction, basic deduction, taxable base, tax, local income tax.
Whether the one-home conditions are met is a human judgement — two years of holding (plus two of residence if the area was regulated at acquisition), and who belongs to the “household” decides it. The statute is quoted in the one-home exemption. Under two years of holding means a flat rate, not the progressive one (70% under a year, 60% from one to two). Selecting a heavy rate excludes the long-term holding deduction. The KRW 2.5m basic deduction is once a year, so two sales in one year get it once. Converted acquisition value, gifts carrying debt, the ten-year carryover rule, reliefs and non-residents are not modelled. An estimate.
The numbers this calculator uses, and where they come from
The base rates apply article 55(1) of the Income Tax Act — the same table as global income tax.
| Taxable base | Rate | Progressive deduction |
|---|---|---|
| Up to KRW 14m | 6% | — |
| 14m – 50m | 15% | KRW 1.26m |
| 50m – 88m | 24% | KRW 5.76m |
| 88m – 150m | 35% | KRW 15.44m |
| 150m – 300m | 38% | KRW 19.94m |
| 300m – 500m | 40% | KRW 25.94m |
| 500m – 1bn | 42% | KRW 35.94m |
| Over 1bn | 45% | KRW 65.94m |
There is a way to check the progressive deductions: the two formulas must agree at each boundary. A base of exactly KRW 14m at 6% is 840,000; at 15% less the 1.26m deduction it is also 840,000. All seven boundaries join (checked directly).
Under two years of holding, this table does not apply.
| Held for | Home or redevelopment right | Purchase right |
|---|---|---|
| Under 1 year | 70% | 70% |
| 1 to under 2 years | 60% | 60% |
| 2 years or more | progressive 6–45% | 60% |
KRW 1.2bn is a slope, not a cliff
Above 1.2bn, a one-home household is taxed on the excess only. The ratio is the apportionment formula in Enforcement Decree article 160 — (sale price − 1.2bn) ÷ sale price.
| Sale price | Ratio | Tax |
|---|---|---|
| KRW 1.2bn | 0% | 0 |
| KRW 1.25bn | 4.00% | 56,760 |
| KRW 1.3bn | 7.69% | 312,231 |
| KRW 1.4bn | 14.29% | 909,857 |
| KRW 1.5bn | 20.00% | 2,623,500 |
| KRW 2bn | 40.00% | 18,089,500 |
The taxable base behind each row, in order: 0, 860,000, 4,730,769, 13,785,714, 24,300,000, 91,100,000. Tax figures include the 10% local surtax.
The top of the table is the point. Selling at 1.5bn on a gain of nearly KRW 670m produces a tax of 2.62m — 0.4% of the gain. The impression that crossing 1.2bn is serious and the actual figure are that far apart. Worked through in how the 1.2bn apportionment works.
The holding deduction has two tables
The same ten years of holding gives more than double the deduction to a one-home household.
| 3 yrs | 5 yrs | 10 yrs | Max | |
|---|---|---|---|---|
| General (table 1) | 6% | 10% | 20% | 30% |
| One home, holding | 12% | 20% | 40% | 40% |
| One home, residence | 12% | 20% | 40% | 40% |
| One home, combined | 80% | |||
General rises 2 points a year, one home 4. The 15-year column is left out: table 1 reaches 30% there and one home stays at 40%, the same as ten.
The residence column has one more row the table above hides — two years to under three is 8%. So two years of residence alone drops the tax in the 1.5bn example from KRW 14.23m to 11.40m. What that row is worth is set out in what residence is worth.
What this calculator does not do
It does not judge the one-home conditions. Two years of holding (plus two of residence if the area was regulated at acquisition), and a “household” that reaches to in-laws and siblings. That judgement starts the calculation and it is human.
It does not produce a converted acquisition value. For an older property that figure decides the tax. The statute fixes an order — Decree art. 176-2(3), “apply the following methods in order”.
(1) a comparable sale of a same or similar asset within three months either side of the transfer or acquisition, then (2) an appraised value (the average of two, though one will do where the published value is 1bn or less), then (3) the converted acquisition value, then (4) the published value. Conversion is third — where either of the first two exists, it goes first.
The formula is in para. 2 of the same article. It sits in the statute as an image, but the alt text carries the expression, so it can be read across — the actual sale price × (the published value at acquisition ÷ the published value at sale).
The surcharge is narrower than it is usually described. Act art. 114-2(1) — where a building was newly built or extended (extensions only where the floor area added exceeds 85 square metres) and transferred within 5 years of acquisition or extension, using an appraised or converted value as the acquisition price adds 5% of that value to the assessed tax. Filing a long-held home on a converted value is not what this article reaches.
Para. 2 adds one more thing — “it shall apply even where there is no calculated capital gains tax”. Zero tax does not mean no surcharge.
The carryover rule, gifts with debt, reliefs and non-residents are not modelled. A home received from a spouse needs ten years to escape the carryover rule.
The KRW 2.5m basic deduction is once a year, and the calculator cannot know whether you sold something else the same year. Each entry gets the full 2.5m.
It assumes a house. The short-holding rates here are 70% under one year and 60% from one to two — the figures the statute attaches to houses, redevelopment rights and pre-sale rights (art. 104(1)2 and 3). For land or commercial property the same rows are 50% and 40%. Switching off “one home per household” still counts a house.
Questions that remain
Zero at 1.2bn — what about 1.2bn plus one won?
Effectively zero. The apportionment ratio is one won divided by 1.2bn, so the taxable gain is a matter of won. In the worked example above (bought at 800m, 30m of expenses, ten years held and resident) the tax stays at zero right up to KRW 1,237.9m, because the apportioned share fits inside the holding deduction and the 2.5m basic deduction. 1.2bn is not a cliff.
How bad is selling at one year and eleven months?
The rate becomes 60% and the holding deduction disappears. Taking the 1.5bn example as a non-exempt sale: at two years the tax is KRW 268.85m; at one year and eleven months it is 440.55m — a difference of 171.70m for one month. And two years of holding is also part of the one-home exemption test.
Is local income tax filed separately?
10% of the assessed tax follows automatically, and the calculator’s total already contains it. Knowing the figure as “KRW 100m of capital gains tax” without it means being short by 10m. A commonly missed line.
Do I file if I made a loss?
Yes. A loss still carries the preliminary filing duty (art. 105(3)). And if another property sold the same year made a gain, the loss can be offset against it — but only if it was filed. The calculator shows zero for a loss and says the return is still due.
How much does the heavy rate change?
It adds 20 points (two homes in a regulated area) or 30 (three or more) to the rate, and excludes the long-term holding deduction. The second matters more — in the 1.5bn non-exempt example, KRW 206.94m becomes 415.70m at +20 points. Restored on 10 May 2026.
📌 2026 tax reform bill — for a single home it replaces the holding-plus-residence deduction with a residence-based “long-term residence deduction” (8% a year of residence, up to 80%, from 2029) and adds a cap the law does not have now — 2 billion won in 2028, 1 billion from 2029; nothing changes through 2027. The bill was finalised on 1 September and sent to the National Assembly on 3 September, so nothing changes until it passes; this calculator uses the law in force now. Details are in our guide to the 2026 tax reform bill (checked 28 September 2026, including the 1 September revisions).
Sources
Income Tax Act — art. 55(1) (base rate table), 95(2) (long-term holding deduction, tables 1 and 2, and the exclusions in its bracket), 103 (KRW 2.5m basic deduction), 104 (short-holding rates and heavy rates; all four cases in para. 7 are homes in an adjustment target area), 105(3) (a loss is still filed), 89(1)3 (one-home exemption and the 1.2bn exclusion), 114-2 (the 5% surcharge on an appraised or converted value, which para. 2 applies even where no tax is due).
Enforcement Decree art. 160 — the gain and the holding deduction on a high-value home are each apportioned by (sale price − 1.2bn) ÷ sale price. This site’s one-home exemption left that formula blank as “an image inside the statute, so we could not read it” — two unrelated sources confirmed it and the gap is now filled. Also art. 176-2(2) and (3) (the four-step order of estimation and the conversion formula) and art. 154(3) and (6) (the mixed-use test; the residence period runs from the move-in date to the move-out date on the resident registration record).
The rate table and both deduction tables were matched band by band against this site’s capital gains calculation — nothing diverged. One outside source was discarded: its table 1 was shifted by a year throughout, showing 4% at three years where the statute says 6%. The articles were opened and read on the national statute portal on 26 August 2026. The article 55(1) rate table was verified by checking that all eight progressive deductions reproduce the statute’s own “running base plus rate on the excess” form at 3,000 points, and tables 1 and 2 of article 95(2) were read at magnification, band by band. That check found a bug in this calculator and it has been fixed — the 8% residence band carries “only where the holding period is 3 years or more”, which was not applied, so 2 years of residence on a 2.5-year holding was wrongly granting 8%.
Where to check further
The purchase contract and the receipts. Necessary expenses count only as far as the paperwork goes.
Whether the area was regulated at acquisition. If it was, the exemption also needs two years of residence.
The Hometax capital gains simulation. The reference for the actual filing.
Anything else sold the same year. The KRW 2.5m deduction and loss offsetting both turn on it.
