When your home goes into a reconstruction or redevelopment project you need somewhere to live for the years of building work. Buy that place and you hold “a redevelopment right + a replacement home”. The proviso to Article 89(2) of Korea’s Income Tax Act names buying a home to live in during a reconstruction or redevelopment project as an exception to the no-exemption rule, and Article 156-2(5) of the Enforcement Decree sets the conditions. When a one-home household sells the replacement home it bought to live in during the project on its home, meeting all three items means it is treated as one household, one home under Art. 154(1) — and then the holding and residence periods do not apply. The three items: (1) buy the replacement home on or after the project implementation approval and live there at least 1 year; (2) the whole household moves into the new home within 3 years of completion and lives there at least 1 year in a row; (3) sell the replacement home before completion or within 3 years after. The checker below judges each item from your dates.
1. Buy on or after project approval and live there at least 1 year (para. 5 item 1). Living there from 10 September 2024 means until 10 September 2025.
2. Whole household moves into the new home within 3 years of completion, for at least 1 year (item 2). Completion on 20 December 2027 means moving in by 20 December 2030.
3. Sell the replacement home before completion or within 3 years after (item 3) — no 2-year holding or residence test.
Checker
Calculates as you type. Dates are YYYY-MM-DD. “After approval” counts the approval day itself, and “1 year” means living there up to the same date a year later (our reading). The household-member exception (Rule Art. 75-2) is not modelled.
Article 156-2(5) — the text
| Provision | What the text says | Points to note (our gloss) |
|---|---|---|
| Main text | Where a one-home household buys another home (a replacement home) to live in during a redevelopment, reconstruction or small-scale reconstruction project on its home, and sells the replacement home meeting all the items below, it is treated as one household, one home and Art. 154(1) applies. In that case the holding and residence periods of Art. 154(1) do not apply. | The home sold is the replacement home; paras. 3 and 4 cover selling the old home |
| Item 1 | Buy the replacement home on or after the project implementation approval date and live there at least 1 year | A home bought before approval is outside it |
| Item 2 | Within 3 years of completion of the home obtained under the plan, the whole household moves in (including where some members cannot for study, work, medical care or other unavoidable reasons set by ordinance) and lives there at least 1 year in a row. But where, within 3 years of completion, the whole household leaves the country for study or work needing at least 1 year abroad, it must live there at least 1 year in a row after returning once the reason ends (only where it ends within 3 years of leaving). | The checker only flags the abroad proviso |
| Item 3 | Sell the replacement home before completion or within 3 years after completion of the home obtained under the plan | Same end date as the move-in deadline |
The unavoidable reasons in item 2 are set by Rule Art. 75-2(1): some household members move to another city or county for a reason in Art. 71(3) — attending a school under the Elementary and Secondary Education Act (other than elementary and middle school) or the Higher Education Act, a job change or transfer, illness needing at least 1 year of treatment or care, or a school-violence transfer.
How the checker counts — our gloss
| Row | Count | Points to note (our gloss) |
|---|---|---|
| Item 1 timing | Replacement home bought on or after the approval date | “On or after” includes the day itself |
| Item 1 residence | The last day lived there is on or after the same date a year after the first | Gaps are not counted — don’t enter broken stays |
| Item 2 | Move-in on or after completion and by the same date 3 years later, plus 1 year in a row | Leave the move-in blank to show “not yet” |
| Item 3 | No completion date means sold before completion; otherwise sold within 3 years after | What counts as completion (use approval etc.) is outside the text |
Four cases — our example
| Example (ours) | Result | Points to note (our gloss) |
|---|---|---|
| Approval 14 June 2024, replacement home bought 1 September 2024, lived there 10 September 2024 to 31 March 2026, completion 20 December 2027, moved in 1 April 2028 for 1 year, sold 10 February 2028 | All three items met — one household, one home | The opening values. Selling before the move is fine (our reading) |
| As above, replacement home bought 30 May 2024 | Item 1 not met — bought before approval | Check the approval date first |
| As above, lived there only until 31 August 2025 | Item 1 not met — needed until 10 September 2025 | Ten days short |
| As above, moved in 1 February 2031 | Item 2 not met — moved in after 20 December 2030 | Deadline missed |
How it differs from the right-holder rules
- Which home is sold — paras. 3 and 4 sell the old home, para. 5 the replacement home. For the old home use the redevelopment right two-home exemption calculator.
- 2-year holding and residence — para. 5 says the Art. 154(1) periods do not apply; the other paragraphs have no such sentence.
- Presale rights — Art. 156-3 has no replacement-home paragraph: presale right two-home exemption calculator.
Checklist
- ☐ Project implementation approval date — from the union notice
- ☐ Replacement home bought on or after that day
- ☐ At least 1 year actually living there (registered)
- ☐ Completion date and the date 3 years later
- ☐ Whole household moves in for 1 year — papers if some members can’t
- ☐ Sell the replacement home within 3 years of completion
Questions that remain
What if the replacement home is over KRW 1.2bn?
Para. 5 only makes it one household, one home. Tax on the part above KRW 1.2bn is worked out in the capital gains tax calculator.
What if I bought two replacement homes?
Para. 5 says “another home (a replacement home)” in the singular. The text does not deal with two or more, so the checker counts one.
Does small-scale reconstruction count?
The main text says “redevelopment, reconstruction or small-scale reconstruction projects etc.”. Decree Art. 155 defines “small-scale reconstruction projects etc.” as small-scale reconstruction, small-scale redevelopment, street-housing improvement and self-led housing improvement projects under the Small-Scale Housing Act (para. 2), and “management and disposal plans etc.” as the management and disposal plan under Art. 74 of the Urban Redevelopment Act (for the small-scale projects, the project implementation plan under Art. 29 of the Small-Scale Housing Act) (para. 20; checked 9 November 2026). So a home being rebuilt through a street-housing or self-led project also falls within the wording (our reading).
Sources
- Korea Law Information Center — Income Tax Act Enforcement Decree Arts. 154(1), 156-2(5) — text (current page, in force 1 Oct 2026, Presidential Decree No. 36737; checked 9 November 2026).
- Korea Law Information Center — Income Tax Act Art. 89(2) — text (in force 1 Jul 2026, Act No. 21221; same day). An 8 Sep 2026 amendment is shown as in force from 9 Sep 2027; the wording on the page is followed.
- Korea Law Information Center — Income Tax Act Enforcement Rule Arts. 71(3), 75-2 — text (in force 1 Jul 2026, Ministry Ordinance No. 33; same day).
- Korean law database — Income Tax Decree Art. 155(2) and (20) — source (in force 1 Oct 2026, Decree No. 36737; checked 9 November 2026). What “small-scale reconstruction projects etc.” and “management and disposal plans etc.” mean.
- Not read. How completion is dated, required papers, rulings and cases.
- What we added. The “points to note” column, the date convention, the examples.
Where to check further
- The project union — approval date, expected completion.
- National Tax Service helpline or your local tax office — proof of residence, unavoidable reasons.
Written on 9 November 2026. The content follows the source texts; the glosses are ours.
