The biggest relief when selling land you have farmed is the self-cultivated farmland reduction. Article 69 of Korea’s Restriction of Special Taxation Act reduces capital gains tax by 100/100 (that is, 100%) on land a resident living near it has farmed directly for 8 years or more. Article 133 then caps the relief at 100 million won a tax year and 200 million won over five tax years. Enforcement Decree Article 66 defines living nearby as the same si/gun/gu, a neighbouring one, or within 30 km in a straight line, and farming directly as working full-time or doing at least half the work yourself. Years in which business income and salary together reach 37 million won are taken out of the farming period. The checker below runs the main tests and the caps.
1. 8 years of living nearby and farming yourself: 100% capital gains tax relief (Art. 69(1)).
2. Capped at 100 million won a year and 200 million over 5 years — the excess is not reduced (Art. 133(1)).
3. Years with business income + salary of 37 million won or more do not count (Decree Art. 66(14)).
Checker
Updates as you type. A simplified check of the main tests we read: residence, farming yourself, 8 years after excluded years, and the urban zoning test. The inherited-farming rules, land-readjustment cases and the 3-year transfer to the Korea Rural Community Corporation are not built in. The caps are those in Art. 133(1) (100 million won a year, 200 million over 5 years); “already reduced” means reductions under the provisions listed there.
The reduction articles
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Art. 69(1) | For income from transferring land that a resident living where the farmland is has farmed directly for 8 years or more, 100/100 of the capital gains tax is reduced. | If rezoned residential etc., only gains up to that date (proviso) |
| Same paragraph, brackets | Land under the farm-retirement direct payment scheme transferred to the Korea Rural Community Corporation or a farming corporation by 31 December 2026: 3 years or more | Special rule to the end of this year |
| Art. 69(3) | Anyone wishing to use it must apply for the reduction as the Decree provides. | No application, no relief |
| Art. 133(1)1 | Where reductions total more than 100 million won in a tax year, the excess is not reduced. | Counted with Arts. 33, 43, 66–70 and others |
| Art. 133(1)2(b) | Where reductions over five tax years exceed 200 million won, the excess (this year + the previous four) | The larger excess is not reduced |
The tests in Decree Article 66
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Residence (para. 1) | Lived for 8 years or more in ① the si/gun/gu of the land ② a neighbouring si/gun/gu ③ an area within 30 km in a straight line, while farming; a resident on the day of transfer (or within 2 years of becoming a non-resident) | Areas moved out by boundary changes still count |
| Land (para. 4) | Farmland you farmed for 8 years or more between acquiring and transferring it, excluding land that, at transfer, has been in a city’s residential, commercial or industrial zone for more than 3 years, among others | Gun of metropolitan cities and eup/myeon of urban-rural cities excluded; see the source for exceptions |
| Farming directly (para. 13) | ① working full-time on your own farmland ② doing half or more of the farm work with your own labour | Either one |
| Excluded years (para. 14) | Tax years in which business income (excluding farming, forestry, property rental and farm side-business income) plus total salary is 37 million won or more, or business revenue reaches a set level, are taken out of the farming period | Negative business income counts as 0 |
Three sums — our example
| Case (our example) | Reduction | Worth noting (ours) |
|---|---|---|
| Farmed 10 years (1 year with salary of 37 million won or more), lived in the same gun, tax 80 million won | 80 million | 9 counted years ≥ 8; under 100 million |
| Farmed 12 years, lived within 30 km, tax 150 million won | 100 million | Yearly 100 million cap — 50 million payable |
| Farmed 12 years, 150 million reduced in the previous 4 years, tax 90 million won | 50 million | The 5-year 200 million cap bites first |
In the third case this year alone is under 100 million won, but 150 million was reduced in the previous four tax years, leaving only 50 million under the 200 million five-year cap. Article 133 refuses “the larger” of the two excesses, so the tighter cap wins (our sum).
Farm 10 years with 3 of them at 37 million won or more of salary or business income, and only 7 years count — short of 8. That is where weekend farmers with a day job are often caught (our gloss).
The exemption for a rural home is in rural home capital gains exemption checker; the tax before relief is in capital gains tax calculator.
Checklist
- ☐ Lived in the same or a neighbouring si/gun/gu, or within 30 km, while farming
- ☐ Full-time, or half the work yourself
- ☐ 8 years or more after removing the 37 million won years
- ☐ Not over 3 years in an urban residential/commercial/industrial zone
- ☐ 100 million a year, 200 million over 5 years
- ☐ Apply for the reduction
Questions that remain
What about farmland I inherited?
Decree Article 66 has rules adding the deceased’s farming period (paras. 11 and 12), but we did not set them out and the checker does not apply them.
Must the 8 years be continuous?
Paragraph 4 says “farmed for 8 years or more between acquiring and transferring it”. We read that as a total, but confirm with the tax office (our reading).
Is local income tax reduced too?
The articles we read cover capital gains tax only. We did not read the local income tax or the special tax for rural development.
Sources
- Korean law database (law.go.kr) — Restriction of Special Taxation Act Arts. 69, 133 — source (current text, effective 18 September 2026, Act No. 21467; checked 2 November 2026). Art. 69 farmland reduction (8 years, 100/100, the 3-year rule to 31 Dec 2026, application), Art. 133(1) overall cap (100 million won a year, 200 million over five years).
- Korean law database — Restriction of Special Taxation Act Enforcement Decree Art. 66 — source (current text, effective 18 September 2026, Presidential Decree No. 36587; checked 2 November 2026). Para. 1 residence (30 km), para. 4 land, para. 13 farming directly, para. 14 the 37 million won test.
- Not read. Decree Art. 66 paras. 5, 6, 11, 12 (inherited farming) and the para. 7 formula, the exceptions and other items of para. 4, the Special Tax for Rural Development Act, local income tax.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Your tax office or Hometax — applying and proving the farming.
- Farm registration records — evidence of farming.
Written on 2 November 2026. The content is from the source; the glosses are ours.
