When you sell a home in Korea, the costs taken off the sale price before capital gains tax are the deductible expenses. Income Tax Act Article 97(1) puts them in three groups: (1) acquisition cost, (2) capital expenditure and the like, and (3) selling costs and the like. Decree Article 163 adds acquisition tax, registration tax and other incidental costs to (1) (applying Art. 89(1)), and allows (2) and (3) only where the proof in Act Art. 160-2(2) was received and kept, or the actual payment is confirmed by financial transaction records. Work paid for without proof drops out however much it was. The calculator takes each item and shows the expenses and the gain.
1. Expenses = acquisition cost (incl. acquisition tax etc.) + capital expenditure + selling costs (Income Tax Act Art. 97(1)).
2. Capital expenditure and selling costs need an invoice, tax invoice, card slip, cash receipt or bank record (Decree Art. 163(3) and (5)).
3. The agent’s fee, contract drafting, vacating costs and the loss on selling housing bonds are selling costs (Art. 163(5)).
Calculator
Updates as you type. For sales where the actual purchase price is known. Capital expenditure and selling costs count only with the proof in Decree Art. 163(3) and (5). It stops at the gain: long-term holding deduction, the 1.2 billion won one-home split and rates are in the capital gains tax calculator.
Act Art. 97 — three groups
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Art. 97(1)1 acquisition cost | The actual transaction price paid; only if it cannot be confirmed, comparable sales, appraisal or converted cost in turn | This calculator covers the actual-price case |
| Art. 97(1)2 | Capital expenditure and the like as set by Presidential Decree | Decree Art. 163(3) |
| Art. 97(1)3 | Selling costs and the like as set by Presidential Decree | Decree Art. 163(5) |
| Art. 97(2)1 | Where acquisition cost is the actual price, the expenses are that price plus the amounts in items 2 and 3 | The basis for adding the three |
(1) Acquisition cost — acquisition tax included
Decree Art. 163(1)1 treats the actual price as the acquisition cost worked out under Art. 89(1). Art. 89(1)1 gives the cost of an asset bought from another person as “the purchase price plus acquisition tax, registration and licence tax and other incidental costs”. So the calculator takes the price and the buying costs separately and adds them. The article does not list what the “other incidental costs” are (such as the agent’s and scrivener’s fees when buying); we read those as going in this box, but check individual items with the tax office.
Art. 163(1) also adds litigation or settlement costs over acquisition (unless already deducted elsewhere), and interest built into the price by agreement (not extra interest for late payment).
(2) Capital expenditure — Decree Art. 163(3) and Art. 67(2)
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Art. 163(3)1 | Capital expenditure worked out applying Art. 67(2) | See Art. 67(2) below |
| Art. 67(2) (applied) | Repair spending to extend useful life or actually increase value, including (1) alteration to change the original use, (2) installing a lift or heating and cooling, (3) installing fire escapes and the like, (4) restoring what was destroyed or damaged by disaster, (5) other improvement, extension or enlargement of a similar kind | Repairs that only keep things as they were read as outside this (our reading) |
| Art. 163(3)2 and 2-2 | Litigation or settlement costs to secure ownership after buying; costs of suing for higher expropriation compensation (up to the increase) | Excluding amounts already deducted |
| Art. 163(3)3 | Costs for change of use, improvement or convenience of use (including demolition when rebuilding after disaster or ageing) | |
| Art. 163(3)3-2 and 3-3 | Development charges and reconstruction charges | Or the share in effect borne by the seller |
| Art. 163(3)4 → Rule Art. 79(1) | Beneficiary charges, removal of obstacles, roads built for land use, land given free for roads, erosion control | Mostly land |
(3) Selling costs — Decree Art. 163(5)
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| (5)1(a) | Securities transaction tax paid | Shares |
| (5)1(b) | Preparing the capital gains tax return and drafting the contract | A tax agent’s filing fee, for example (ours) |
| (5)1(c) | Notary fees, stamp duty and brokerage fees | The agent’s fee when selling |
| (5)1(d) | Vacating costs the seller pays to hand over the property under the contract | Paying a tenant to leave, for example (ours) |
| (5)2 | The loss on selling, before maturity, the national housing bonds or land development bonds bought under law when acquiring real estate — if sold to someone other than a designated financial institution, capped at the loss had it been sold to one that day | The loss on bonds sold right after buying |
The agent’s ceiling when selling is in the real estate brokerage fee calculator; the bonds you had to buy are in the national housing bond calculator.
Proof — what counts
The proof in Act Art. 160-2(2) that Art. 163(3) and (5) point to is one of four: (1) an invoice, (2) a tax invoice, (3) a credit card slip (or similar), (4) a cash receipt. Either keep one of those, or have the actual payment confirmed by financial transaction records; we read a bank transfer record as the latter. With neither, put the amount in a “no proof” box — the calculator only shows it as left out.
One home’s sum — our example
| Item (our example) | Amount | Worth noting (ours) |
|---|---|---|
| Sale price | 900 million won | A Seoul flat, say |
| (1) Purchase 600 million + acquisition tax etc. 20 million | 620 million won | Art. 89(1)1 |
| (2) Capital expenditure with proof | 30 million won | Heating and cooling installed, a change-of-use alteration |
| (2) Capital expenditure without proof | 10 million won → left out | Paid in cash, no receipt |
| (3) Selling cost — agent’s fee | 4.5 million won | 0.5% per side on a 900 million sale |
| Total expenses | 654.5 million won | 620 + 30 + 4.5 million |
| Gain | 245.5 million won | 900 − 654.5 million |
Had the 10 million won been backed by proof, expenses would be 664.5 million and the gain 235.5 million won — 10 million won lower (our sum). For a one-household-one-home sale of 1.2 billion won or less no tax arises at all, so this matters when the sale is taxable — see our one-home capital gains tax guide.
Window frames and wallpaper — which side?
The articles name no items such as window frames, balconies, boilers or wallpaper. The only tests are Art. 67(2)’s “repair spending to extend useful life or actually increase value” and Art. 163(3)3’s “change of use, improvement or convenience of use”. On our reading, spending that just restores what was worn is hard to fit, while new equipment or reshaped space may fit. Which side a given job falls on turns on National Tax Service rulings, which we did not read. For large amounts, ask the tax office before filing.
Checklist
- ☐ Both sale contracts and the acquisition tax receipt
- ☐ Work costs: tax invoice, card slip, cash receipt or bank transfer record
- ☐ The agent’s receipt when selling, the filing fee
- ☐ If you sold housing bonds at once, the loss statement
- ☐ Leave out anything already deducted against other income
Questions that remain
What if I don’t know the purchase price?
Only then are comparable sales, appraisal or converted cost used in turn (Act Art. 97(1)1(b)). Expenses are then a deemed amount under Decree Art. 163(6) (for land, the officially assessed land price at acquisition × 3/100, etc.), outside this calculator.
Is mortgage interest deductible?
Interest on money borrowed to buy is not in the lists of Art. 163(1), (3) or (5) we read. Only interest built into the price by agreement goes into acquisition cost ((1)3).
Sources
- Korean law database (law.go.kr) — Income Tax Act Enforcement Decree Arts. 163, 89, 67 — source (current text, effective 1 October 2026, Presidential Decree No. 36737; checked 3 November 2026). Art. 163(1) (acquisition cost, litigation costs, built-in interest), (3) (capital expenditure items 1–4 and proof), (5) (selling costs 1(a)–(e), 2 bond losses, proof), (6)1 (deemed expenses for land, 3/100); Art. 89(1)1 (price + acquisition tax, registration tax and other incidental costs); Art. 67(2) (meaning of capital expenditure).
- Korean law database (law.go.kr) — Income Tax Act Arts. 97 and 160-2 — source (current text, effective 1 July 2026, Act No. 21221; checked 3 November 2026). Art. 97(1) (three groups) and (2)1 (adding them), Art. 160-2(2) (invoice, tax invoice, card slip, cash receipt).
- Korean law database (law.go.kr) — Income Tax Act Enforcement Rule Art. 79 — source (current text, effective 1 July 2026, Ordinance No. 33; checked 3 November 2026). (1) (beneficiary charges, obstacle removal, roads, etc. under Decree Art. 163(3)4).
- Not read. National Tax Service rulings on individual works, the rest of Art. 163(6), Art. 163(2), (4) and (7) onward.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Your tax office or the National Tax Service helpline — whether a given job is capital expenditure.
- Hometax capital gains return — the expense schedule.
Written on 3 November 2026. The content is from the source; the glosses are ours.
