The tax that swings hardest when you sell a home is capital gains tax. A single-home household is usually exempt — yet people miss the requirements by a hair and pay tens of millions of won. Here are the parts that actually trip people up.
Three basic requirements — ① one household, one home as of the sale date ② held 2+ years (plus 2+ years of actual residence if it was in a regulated area when acquired) ③ sale price ₩1.2B or less. Above that, only the excess portion is taxed.
① Start with "one household"
First check whether the whole household owns just one home. Holdings of your spouse and household members are counted together. Splitting titles doesn't automatically create separate households.
Living with parents who own their own home can make you a two-home household. Separation is judged by actual living and financial arrangements.
② The two years — when does the clock start?
This is where mistakes happen. Acquisition and sale dates are based on the balance payment (closing) date — not the contract date.
- Holding — 2+ years from acquisition
- Residence — if the property was in a regulated area at the time of purchase, you also need 2+ years of actual residence
Note the phrase "at the time of purchase." Even if the area has since been deregulated, buying while it was regulated keeps the residence requirement attached.
A "win-win landlord" special exemption can waive the 2-year residence requirement in regulated areas if you meet conditions such as capping rent increases at 5%. It runs to a set deadline, so check the timing if it applies to you.
③ ₩1.2B — is everything taxed above it?
No. Only the gain attributable to the portion above ₩1.2B is taxed. Selling at ₩1.3B doesn't tax the whole gain — just the proportional excess.
On top of that, the long-term holding deduction for a single-home household can reach 80% based on years held and lived in, which sharply reduces the actual bill even on expensive homes.
Temporary two homes — the upgrade trap
If you buy a new home before selling the old one, selling the old home within a set period still qualifies for the exemption.
But that period varies by area and purchase timing, and changes often. Don't rely on "usually a few years" — confirm the deadline for your case. A single day can cost you the exemption.
Checklist before selling
- Confirm the acquisition (closing) date from the property register
- Confirm residence periods from your resident registration abstract
- Check homes held by every household member
- Check whether the area was regulated at purchase
- Gather expense receipts — acquisition tax, brokerage fees and capital improvements (windows, extensions) are deductible, but only with documentation
FAQ
Is two years of holding enough?
Usually in non-regulated areas — but a home bought in a regulated area also needs two years of residence.
I rented it out and never lived there.
Fine for non-regulated purchases; for regulated-area purchases, failing the residence test means tax applies.
When do I file?
A preliminary return is due within two months from the end of the month of sale. Even exempt sales may need confirmation.
How is this different from property tax?
Property tax is paid while you hold; capital gains tax applies to the profit when you sell.
"Almost qualifying" doesn't count. Before selling, write down your closing date, residence period and household's home count — and check them.
This is general information, not tax advice. Property tax rules change frequently and outcomes vary widely — consult a tax professional before selling.
