By far the largest tax when selling a home in Korea is capital gains tax. Yet ask “how much will it be?” and nobody can answer straight away — because holding period, number of homes, location and residence can swing the bill several times over.
This guide walks through the calculation in order. Use the tables to plug in your own case.
1. How much it varies. On the same sale, holding period, number of homes, location and residence can swing the bill several times over — which is why nobody answers “how much?” straight away.
2. What changed in 2026. The four-year suspension of the multi-home surcharge ended on 9 May 2026 and the surcharge returned on 10 May — in regulated areas +20%p for two homes and +30%p for three or more, with the long-term holding deduction disallowed. And the carry-over rule went from five years to ten, so gifting to a spouse before selling now means waiting a decade.
3. What to do. Receipts are money on the expense side — acquisition tax, agent commission and scrivener fees count, while wallpaper, flooring and kitchen replacements do not. Work through the calculation below with your own case.
On 3 August 2026 a bill was published that reworks the long-term deduction. It would be renamed the “long-term occupancy income deduction” and the basis would move from holding to living there (single home: 8% a year lived from 2029, with the 80% cap unchanged). A cap on the deduction amount would also be introduced where there is none today — ₩2bn in 2028 and ₩1bn from 2029. 2027 is unchanged and it has not passed the National Assembly — everything below is current law. See our guide to the 2026 tax reform bill.
Step 1 — The calculation flow
| ① Capital gain | Sale price − purchase price − allowable expenses |
| ② Taxable gain | ① − long-term holding deduction |
| ③ Tax base | ② − basic deduction of ₩2.5M (once a year) |
| ④ Computed tax | ③ × rate − progressive deduction |
| ⑤ Total payable | ④ + local income tax (10% of ④) |
People routinely forget the last line. Local income tax of 10% always follows. A ₩100M computed tax means ₩110M out the door.
Step 2 — The rate table
Hold for two years or more and the progressive rates apply.
| Tax base | Rate · progressive deduction |
| Up to ₩14M | 6% · 0 |
| ₩14M – ₩50M | 15% · ₩1.26M |
| ₩50M – ₩88M | 24% · ₩5.76M |
| ₩88M – ₩150M | 35% · ₩15.44M |
| ₩150M – ₩300M | 38% · ₩19.94M |
| ₩300M – ₩500M | 40% · ₩25.94M |
| ₩500M – ₩1B | 42% · ₩35.94M |
| Over ₩1B | 45% · ₩65.94M |
Short holding is taxed completely differently
| Holding period | Housing / pre-sale rights |
| Under 1 year | 70% / 70% |
| 1 to 2 years | 60% / 60% |
| 2 years or more | Progressive (6–45%) / 60% |
| Unregistered transfer | 70% |
Clearing two years is the first fork. Sell at 23 months and it's 60%; at 25 months the top progressive rate is 45%. Two months flips the outcome.
The row most often missed in the rate table is the pre-sale right. On one axis, the missing step stands out.
Step 3 — The multi-home surcharge (back since May 10, 2026)
| Two homes (selling in a regulated area) | Base rate + 20%p |
| Three or more (regulated area) | Base rate + 30%p |
| Long-term holding deduction | Disallowed for surcharged homes |
| Non-regulated areas | No surcharge (base rates) |
At the top bracket with three homes: 45% + 30%p = 75%, and with local income tax the effective rate reaches 82.5% — most of the gain goes to tax.
Transitional relief — contracts signed by May 9, 2026 with documented deposit payment are exempt from the surcharge. Keep the contract and transfer records if this applies to you.
The surcharge does not stop at the rate: the long-term holding relief goes with it.
Step 4 — Long-term holding deduction
| General property (3+ years) | 2% per year, up to 30% (15 years) |
| Single home — holding | 4% per year, up to 40% |
| Single home — residence | 4% per year, up to 40% |
| Single home total | Up to 80% (holding + residence) |
A single-home household counts holding and residence separately and adds them. Ten years of each gives 80% — so a ₩1B gain is taxed on only ₩200M. Conversely, surcharged sales lose this deduction entirely, which often hurts more than the higher rate.
The most-missed point — residence is counted separately. The realtors' association table lists 8% for two to three years of residence as its own column. In other words, if you never lived there you top out at 40%. People who remember only “single home means 80%” lose half of it here.
And if residence falls short of two years, a single-home household reverts to the general table — the same source gives 6% at three to four years and 30% at fifteen years or more for general property.
What changed in 2026 — a ten-year look-back
One item in the tax accountants' summary of 2026 changes hits capital gains directly. Assets gifted by a spouse or a direct ascendant or descendant within ten years counted back from the sale date fall under the expense-calculation special rule, and this applies to sales from 1 January 2026.
Gifting to a spouse to step up the cost basis before selling now requires waiting ten years. If you built a plan on the older rule, run the numbers again.
The same source notes the surcharge exemption for completed unsold homes outside the capital region was extended by a year, to homes acquired through 31 December 2026.
Non-residents work to different tests
This covers selling a Korean home while living abroad. The figures in the realtors' association guidance:
| Resident test | 183 days of domestic residence |
| Sale after departure | Within two years |
| After an emigration certificate | Sell within one year |
Miss these and the single-home exemption can be lost. If you are planning to leave, fix the sale date first and move around it.
Step 5 — Allowable expenses: receipts are money
| Allowed | Not allowed |
| Acquisition and registration tax | Wallpaper and flooring |
| Agent commissions (buy and sell) | Sink and lighting replacement |
| Legal scrivener fees | Boiler repair (routine) |
| Balcony extension | Paint |
| Window (saesi) installation | Appliances |
| Heating system upgrade | Cleaning and moving costs |
| Tax filing fees | Loan interest |
One test decides it: spending that raises value or extends life (capital expenditure) counts; spending that maintains condition (repairs) doesn't. And without documentation — invoices, card records, transfers — nothing counts, however real the spending was.
Worked example
Bought at ₩500M, sold at ₩900M, held and lived in for 8 years, single-home household, ₩30M of expenses:
| Sale price | ₩900,000,000 |
| − Purchase price | ₩500,000,000 |
| − Expenses | ₩30,000,000 |
| = Capital gain | ₩370,000,000 |
| Exemption test | Under ₩1.2B → fully exempt |
| Tax due | ₩0 |
Meet the single-home requirements under ₩1.2B and even this gain is tax-free — the realtors' association guidance likewise states the exemption runs up to ₩1.2B. Sell the same home as a two-home owner in a regulated area and the deduction disappears while the surcharge applies — comfortably over ₩100M in tax. Same home, same gain, different household.
Filing and payment
| Preliminary return | Within 2 months from month-end of sale |
| Final return | Following May, if multiple sales in a year |
| Reference date | Balance payment date (or registration, whichever is earlier) |
| Installments | Available above ₩10M |
| Non-filing penalty | 20% plus late-payment penalties |
Tax-saving checklist
- Always clear two years — avoiding 60–70% rates comes first
- Check single-home status — household-wide home count, plus residence if bought in a regulated area
- Collect receipts — acquisition tax, commissions, extensions, windows
- Split sales across tax years to use the ₩2.5M deduction twice and lower brackets
- Order matters for multi-home owners — which home you sell first changes everything
- Consult before selling — one day's difference in closing can flip the result
The acquisition tax, commission and scrivener receipts from when you bought are what become allowable expenses here — start collecting at purchase. If the home was leased out, the tenant's rights also shape your sale timetable, and the temporary-two-home test at the buying stage is covered in the acquisition tax guide.
Questions you may have
What if I don't know the purchase price?
A converted acquisition value can be used, though it may be less favorable. Hunt for the original contract first.
What's the basis for an inherited home?
The valuation at the date of inheritance. Keep the inheritance tax documents.
Does joint ownership reduce tax?
Usually yes — the gain is split by share, each spouse gets their own progressive brackets and their own ₩2.5M deduction.
I sold at a loss — do I file?
No tax is due, but filing lets you offset gains from other sales in the same year.
Can I gift to my spouse and then sell?
For sales from 2026, the expense-calculation special rule reaches back ten years on assets gifted by a spouse or direct ascendant or descendant. Recalculate any plan built on the earlier rule.
Is there a tax while I hold it?
Yes — property tax annually, plus the comprehensive real estate tax above a certain assessed value. The assessment date is 1 June, so the closing date matters.
The filing deadline and instalment threshold, as written
Guides state the final-return deadline and the instalment threshold slightly differently. Here is the wording of Income Tax Act arts. 110 and 112, carried as written.
| Item | As written | Provision |
|---|---|---|
| Final return deadline | “shall report to the head of the competent tax office from 1 May to 31 May of the year following that taxable period” | art. 110(1) |
| Even at a loss | “shall also apply where there is no tax base or where there is a deficit for the taxable period” | art. 110(2) |
| If you filed a preliminary return | “a person who has filed a preliminary return need not file a final return” | art. 110(4), main text |
| Except | “where two or more preliminary returns on assets subject to progressive rates are filed in the taxable period … this shall not apply” | art. 110(4), proviso |
| Instalments | “a person whose tax payable each exceeds ₩10 million may pay part of it in instalments within two months after the payment deadline” | art. 112 |
Sell twice in one year and May comes back. It is easy to assume a preliminary return closes the matter, but two or more preliminary returns on progressive-rate assets revive the final-return duty (art. 110(4), proviso). Filed separately, each would sit in a lower bracket — the point is to recombine and recompute.
The word “each” in art. 112 is easy to miss. The ₩10 million test applies separately to the preliminary return (art. 106) and the final return (art. 111) — not to the two combined. The window is two months after the payment deadline.
A loss still has to be filed. Art. 110(2) is explicit: it applies “where there is no tax base or where there is a deficit.” Carrying a loss forward starts with filing it.
Sources and where to check
- National Tax Service — Long-term holding special deduction rates (checked August 2026). Deduction rates previously taken from an association publication are now checked against the agency table. Source for the rates on disposals from 1 January 2021 — land, buildings and multiple-home owners start at 6% from three years and rise 2 percentage points a year to 30% at fifteen years, while a single-home household counts holding period and residence period separately, each starting at 12% from three years and rising 4 percentage points a year. The table is split into columns by disposal period from 2008 onward, so which column applies depends on the date of disposal — also confirmed from the source.
- Korea Association of Realtors news — summary of 2026 property tax amendments (February 2026). Source of the surcharge suspension ending 9 May 2026, the +20% and +30% add-ons, the deemed rental income rule for high-value homes, and the related-party undervalue test.
- Korea Association of Realtors news — holding property longer cuts the tax (July 2025). Source of 6% at three to four years and 30% at fifteen years or more for general property, 40% at ten years for a single-home household, 8% for two-to-three years of residence, the 80% maximum over ten years on high-value homes, and the short-holding rates (50% under one year, 70% for housing; 40% under two years, 60% for housing).
- Korea Association of Realtors news — capital gains tax for non-residents (August 2025). Source of the “within two months from the last day of the month of transfer” filing deadline, the ₩1.2B single-home exemption, the 24%–80% long-term holding deduction range, and the non-resident tests (183 days, two years after departure, one year after an emigration certificate).
- Korean Association of Certified Public Tax Accountants — what changes in 2026 (effective 1 January 2026). Source of the ten-year look-back on assets gifted by a spouse or direct relative, applying to sales from 1 January 2026, and the extension of the surcharge exemption for completed unsold homes outside the capital region to 31 December 2026.
- Korean Law Information Center — statute — Income Tax Act art. 110 (final return on capital gains) and art. 112 (instalment payment) (in force 1 Jan 2026, Act no. 21221). Source for the 1–31 May deadline, the duty to file even at a loss, the preliminary-return exemption and its “two or more progressive-rate returns” exception, and the “each exceeding ₩10 million” instalment test with its two-month window. This closes the filing-deadline and instalment items.
Written as of July 2026. The surcharge revival date and add-on rates, the short-holding rates, the endpoints of the long-term holding deduction and its 80% maximum, the ₩1.2B exemption, the two-month filing deadline and the ten-year look-back all come from the sources above. However, the middle rows of the long-term holding deduction table could not be transcribed reliably, because the original is published as an image. The May filing deadline and the ₩10M instalment threshold were checked directly against Income Tax Act arts. 110 and 112 this time — which also surfaced the “two or more preliminary returns revive the final-return duty” rule that was absent from the earlier version. By contrast, the base rate brackets (6–45%) and their progressive deductions, the ₩2.5M basic deduction, the 10% local income tax, the 20% non-filing penalty, the itemised list of allowable and disallowed expenses, the converted acquisition value method, and the two-year residence requirement in regulated areas remain unconfirmed. The rate table is published as an image even on the law portal, so it could not be read as text. Confirm on Hometax or with a tax professional before selling. This is general information, not tax advice.
