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 per income category — below) |
| 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 |
We checked this table against the statute. It is the rate table in Income Tax Act Article 55(1), which on the law portal is an image, so it does not appear as text — the original sits in the image’s alt text. The statute never uses the words “progressive deduction”; it writes out the fixed amount at the start of each band:
up to ₩14M 6% / ₩0.84M + 15% of the excess / ₩6.24M + 24% / ₩15.36M + 35% / ₩37.06M + 38% / ₩94.06M + 40% / ₩174.06M + 42% / 45%.
Rebuilding the progressive deductions above from those figures, all eight rows match (our arithmetic) — e.g. the 24% band is ₩6.24M + (X − ₩50M) × 0.24 = 0.24X − ₩5.76M.
But the alt text drops the last band’s fixed amount. The “over ₩1B” row reads only “45 per cent of the amount exceeding ₩1 billion”, with no starting figure. Carried on from the seven rows before it, it has to be ₩174.06M + (₩1B − ₩500M) × 42% = ₩384.06M, and the matching table in Local Tax Act Article 103-3 (non-business land: base rate + 10 points, divided by 10) backs it up by writing its last row as ₩48.406M — times ten that is ₩484.06M, exactly ₩384.06M + ₩1B × 10%.
Alt text is not always complete. So this page did not copy that row as given; it chained the rows and cross-checked first.
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.
📌 2026 tax reform bill — it would ease the regulated-area surcharge in 2027–2028 (homes held 2+ years: +5/+10 points for two homes, +10/+15 for three or more, back to +20/+30 from 2029) and raise the basic deduction from 2.5 million to 25 million won for a single home lived in for 10+ years and sold for up to 3 billion won (Ministry release of 3 August, p.20). A decree change cutting the regulated-area temporary two-home period from three years to two took effect on 1 October 2026 (Presidential Decree No. 36737; new homes in regulated areas acquired from 4 August; checked 1 October 2026). Statutory items need the National Assembly; this article uses current law — see our guide to the 2026 tax reform bill (checked 28 September 2026).
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. That too is in the statute — Decree Article 159-4 defines the qualifying single home as one “held with a residence period of two years or more during the holding period”. Short of two years, you never enter Table 2.
The two deduction tables — statutory text
This page used to give only the endpoints, from press material. Here are both tables in Article 95(2), middle rows included, taken from the images’ alt text.
| Holding period | Table 1 (general) | Table 2 (single home) — holding | Table 2 — residence |
|---|---|---|---|
| 2 to under 3 years | — | — | 8% (only where held 3 years or more) |
| 3 to under 4 years | 6% | 12% | 12% |
| 4 to under 5 years | 8% | 16% | 16% |
| 5 to under 6 years | 10% | 20% | 20% |
| 6 to under 7 years | 12% | 24% | 24% |
| 7 to under 8 years | 14% | 28% | 28% |
| 8 to under 9 years | 16% | 32% | 32% |
| 9 to under 10 years | 18% | 36% | 36% |
| 10 years or more | 20% | 40% (stops here) | 40% (stops here) |
| 11–14 years | 22 / 24 / 26 / 28% | — | — |
| 15 years or more | 30% | — | — |
Every middle row checked out — Table 1 rises 2 points a year from 3 to 15 years, Table 2 4 points a year, and both stop at 10.
What stands out is the first residence row, which has no holding-side twin — “2 to under 3 years: 8%” carries the bracket «only where the holding period is 3 years or more». Two years of living there gives nothing if you have not held it for three.
Table 2 starts at 12% in year three, which looks like 4% a year accruing from year one — but the table has no rows for years one and two. It is a door that opens only at three years.
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.
Where this table comes from — Decree Article 163
Act Article 97(1) splits allowable expenses into acquisition cost / capital expenditure etc. / costs of transfer etc., and hands the last two to the Decree — Decree Article 163(3) and (5).
| Provision | What it lists |
|---|---|
| Decree 163(3) item 1 | Capital expenditure (applying Article 67(2) mutatis mutandis) |
| (3) items 2 · 2-2 | Litigation or settlement costs to secure ownership / litigation costs to increase expropriation compensation (capped at the increase) |
| (3) item 3 | Costs for change of use, improvement or convenience of use (including demolition for an unavoidable rebuild) |
| (3) items 3-2 · 3-3 | Development charges · reconstruction excess-profit charges |
| (5) item 1 (a)–(e) | Securities transaction tax / preparing the CGT return and the contract / notarisation, stamp duty and brokerage / vacating costs / similar costs |
| (5) item 2 | Loss on selling mandatory national housing or land development bonds before maturity |
This is where the “allowed” column above hangs in the text. Balcony extension, window frames and heating replacement are (3) item 3, “improvement or convenience of use”; the CGT filing fee and brokerage are (5) item 1 (b) and (c). Wallpaper, flooring and boiler repair appear nowhere on the list — not “disallowed” so much as not listed.
And a condition comes before the list. Both (3) and (5) say in their opening words: “where the supporting documents are received and kept, or the actual expenditure is confirmed by financial transaction records”. Being on the list is not enough without evidence.
Development and reconstruction charges were not on this page before — where the payer and the seller differ, the share effectively borne by the seller counts.
If the purchase contract is lost — converted acquisition value
The proviso to Article 97(1)1 opens the way: “item (b) applies «only where» the actual transaction price in item (a) «cannot be confirmed»”. Item (b) then applies a comparable sale price → an appraised value → the converted acquisition value, «in that order» — a sequence, not a choice.
Income Tax Act Enforcement Decree Article 176-2(2)2
Converted acquisition value = actual sale price (or comparable sale price or appraised value) × (standard value at acquisition ÷ standard value at sale)
Paragraph (1) of the same article says when this route applies — item 1, the books, contract, receipts or other evidence are missing or materially incomplete; item 2, their contents are plainly false in the light of comparable sale prices or appraisals. The condition is “cannot be confirmed”, not “was not submitted”.
The ₩2.5M basic deduction — per person, and «per income category»
Article 103(1): “₩2.5 million a year shall be deducted «respectively» from the capital gains of the tax period, «for each of the following categories of income»” — real property and the like (Art. 94(1) items 1, 2 and 4), shares (item 3), derivatives (item 5) and trust beneficiary rights (item 6) each get their own ₩2.5M. Sell a home and some shares in the same year and the ₩2.5M applies twice.
- Unregistered assets are excluded (item 1 proviso).
- The order is fixed too (para. (2)) — where there is exempt income, deduct first from the gains «other than» the exempt part, and within those starting with the asset sold first. With several sales in one year, this decides where the deduction lands.
- It is per person, so joint owners each get one — see joint ownership and apportionment.
Two years’ residence in a regulated area — “at the time of acquisition” is in the brackets
The square brackets in the main text of Decree Article 154(1):
… a holding period of two years or more [for a home that was in a regulated area «at the time of acquisition», a holding period of two years or more with a residence period of two years or more during it]
It is measured «at acquisition». Even if the area is de-designated by the time you sell, if it was regulated when you bought, the two years’ residence still applies; conversely, if it was not regulated when you bought, a later designation does not add the requirement. Judging it by “is it regulated now” can get it backwards.
How residence is counted is in the same article — paragraph (6): “the period from the move-in date to the move-out date on the resident registration abstract”. The abstract is the measure, not other evidence of living there.
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.
When you must still file the May capital gains return is in capital gains final return.
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.
To try your own figures, the capital gains tax calculator works through the apportionment step that appears above KRW 1.2bn for a one-home household and both long-term holding deduction tables.
Sources and where to check
- National Law Information Center — statutory text — Income Tax Act, Article 55 (tax rates). The eight base-rate bands, an image in the statute, taken from its alt text. The last band’s fixed amount (₩384.06M) is missing from the alt text, so it was chained from the seven rows before it and checked against the matching table in Local Tax Act Article 103-3 (₩48.406M) (18 September 2026).
- National Law Information Center — statutory text — Same Act, Article 95 (long-term holding deduction). Every band of Table 1 (general, 6% at 3 years to 30% at 15+) and Table 2 (single home, holding 12% to 40%, residence 8% to 40%) — where this page said the middle rows could not be matched. The “only where held three years or more” bracket on the first residence row is original text.
- National Law Information Center — statutory text — Same Act, Article 103 (basic deduction). “For each category of income … ₩2.5 million respectively”, the unregistered-asset proviso and paragraph (2)’s order.
- National Law Information Center — statutory text — Same Act, Article 97 (allowable expenses) and Decree Article 163. Paragraph (3)’s six kinds of capital expenditure (development and reconstruction charges included), paragraph (5)’s costs of transfer, and the evidence condition in both.
- National Law Information Center — statutory text — Income Tax Act Enforcement Decree, Article 176-2. Paragraph (1)’s two grounds and paragraph (2)2’s converted acquisition value formula (an image; read from its alt text).
- National Law Information Center — statutory text — Decree Article 154 (scope of a single home) and Article 159-4 (long-term holding deduction). The bracketed “regulated area at the time of acquisition”, paragraph (6)’s residence definition, and “residence period of two years or more during the holding period”.
- 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. On 18 September the middle rows of the long-term holding deduction table were taken from the statute and all matched (Art. 95(2) Tables 1 and 2, from the images’ alt text; this English page updated 20 September). 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. The rest were filled from the statute the same day — the base-rate bands and progressive deductions (Art. 55(1), all eight rows rebuilt and matched), the ₩2.5M basic deduction (Art. 103(1)), the list of allowable expenses (Art. 97(1), Decree Art. 163(3) and (5)), the converted acquisition value (Decree Art. 176-2(2)2) and the two-year residence rule in regulated areas (Decree Art. 154(1), in brackets). The rate table is still an image on the law portal, but its alt text carries the original — except that the last band’s fixed amount is missing from it, so it was chained and checked against the Local Tax Act’s matching table. Local income tax and the non-filing penalty are outside this page’s scope; their provisions are named but the figures are not restated here. Confirm on Hometax or with a tax professional before selling. This is general information, not tax advice.
