Korean landlords who keep rent rises small can have the residence requirement waived when they sell. Article 155-3 of the Income Tax Act Enforcement Decree says that a home let under a lease raising deposit or rent by no more than 5% over the previous lease (a sangsaeng lease), signed between 20 December 2021 and 31 December 2026, after letting for 18 months under the previous lease and for 2 years under the new one, is sold free of the residence-period limits in Art. 154(1) and related rules. An amendment of 30 September 2026 (effective 1 October) adds a deadline: the sale must come by the earlier of 1 year after the new lease ends and 31 December 2029. The calculator checks the increase and the deadline together.
1. Deposit or rent up no more than 5% on the previous lease, signed 20 December 2021 to 31 December 2026, with proof of the deposit received.
2. Previous lease ran 18 months or more; the new lease runs 2 years or more.
3. Sell by the earlier of 1 year after the new lease ends and 31 December 2029 — leases ending by 31 December 2026 have until 31 December 2027.
Calculator
Updates as you type. Where deposit and rent are swapped, we compare converted deposits (deposit + monthly rent × 12 ÷ rate) at the lower of 10% and base rate + 2% (Housing Lease Protection Act Art. 7-2 and Decree Art. 9); the formula is our method, not text. Without a swap we check deposit and rent each against 5% (our reading). Lease months follow para. 3: by calendar, part months count as one.
Article 155-3 — the text
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| (1) main text | A household owning one home in Korea (including one treated as such under Art. 155 etc.) that sells a home meeting all the items by the earlier of the day 1 year after the item 3 lease ends and 31 December 2029 (by 31 December 2027 if that lease ends by 31 December 2026) is not bound by the residence-period limits in Art. 154(1), Art. 155(20)(1) and Art. 159-4 | The deadline arrived with the 30 September 2026 amendment |
| (1) item 1 | A lease with an increase in deposit or rent not exceeding 5/100 over the previous lease signed with a tenant after buying (a lease taken over on purchase doesn’t count), signed 20 December 2021 to 31 December 2026 (deposit receipt shown) and started | A home bought with a sitting tenant: that lease isn’t the benchmark |
| (1) item 2 | Let under the previous lease for 1 year 6 months or more | — |
| (1) item 3 | Let under the sangsaeng lease for 2 years or more | — |
| (2) | Where deposit and monthly rent are swapped, the increase is worked out under Private Rental Housing Act Art. 44(4) | See below |
| (3) | Lease periods by calendar; part of a month counts as a month | — |
| (4) | Where a new lease follows because the tenant couldn’t continue, and ministry-rule conditions are met, the periods are added | We didn’t read that rule |
| (5) | File the special-case form with both leases attached to the tax office by the return deadline | Don’t miss the form |
The new deadline — before and after
On the old-and-new comparison screen, the previous text (Decree No. 36343) said only “where it sells” and had no sell-by date. The new text (No. 36737, effective 1 October 2026) adds “by the earlier of the day 1 year after the lease ends and 31 December 2029”. The decree’s addendum sets transition rules only for the temporary two-home item (Art. 155(1) item 1); we did not see one for this article in what we read. If your sangsaeng lease has already ended, ask the tax office how the date applies.
Swapping deposit and rent — working out the increase
Paragraph 2 points to Private Rental Housing Act Art. 44(4), which leaves the conversion rule to a ministry rule; Enforcement Rule Art. 18 says converted rent can’t exceed the range in Housing Lease Protection Act Art. 7-2. That article caps the rate at the lower of a Decree rate reflecting bank lending rates and the Bank of Korea base rate plus a Decree margin; Decree Art. 9 sets these at 10% a year and 2% a year. The calculator turns both leases into “converted deposit = deposit + monthly rent × 12 ÷ rate” and compares them. That formula is our method; the text doesn’t spell it out.
Three sums — our example
| Example (ours) | Increase · result | Worth noting (ours) |
|---|---|---|
| Deposit-only lease, KRW 300m → KRW 315m | 5.00% · met | 300m × 105% = 315m; 10,000 won more and it fails |
| Deposit KRW 200m + rent 500,000 → deposit KRW 100m + rent 1m, rate 5% | 6.25% · over | Converted KRW 320m → KRW 340m |
| Deposit KRW 100m + rent 500,000 → same deposit, rent 520,000 | 4.00% · met | No swap: rent compared alone |
For the deadline: a sangsaeng lease ending 31 March 2027 gives 31 March 2028; one ending 30 November 2026 gives 31 December 2027 under the bracket; one ending 30 June 2029 gives 31 December 2029, earlier than a year on (our sums). The 5% rate assumes a 3.00% base rate as an example; use the base rate at signing.
Checklist
- ☐ The previous lease was one you signed after buying (not taken over)
- ☐ Increase within 5%, converted if deposit and rent were swapped
- ☐ New lease signed by 31 December 2026; keep proof of the deposit received
- ☐ 18 months and 2 years reached, counted by calendar
- ☐ Sale planned within 1 year of the lease ending (or by 31 December 2029); file the special-case form
Questions that remain
Is the 2-year holding rule waived too?
The text waives only “residence-period limits”; holding rules read as unchanged (our reading). Both are in one-home capital gains tax exemption.
Is this the same 5% as a mid-lease rise?
No. Mid-lease increases are capped by Housing Lease Protection Act Art. 7; see the housing rent 5% increase calculator.
Sources
- Korean law database (law.go.kr) — Income Tax Act Enforcement Decree Art. 155-3 — source (current text, effective 1 October 2026, Presidential Decree No. 36737; checked 28 October 2026). Para. 1 main text (residence limits waived; sell-by date added 30 September 2026) and items 1–3, para. 2 conversion, para. 3 calendar months, para. 4 added periods, para. 5 the form. The old-and-new comparison (Decree No. 36343 to No. 36737) shows the deadline is new.
- Korean law database — Private Rental Housing Act Art. 44(4) and Enforcement Rule Art. 18 — Act (effective 2 January 2026, Act No. 21065) · Rule (effective 27 October 2026, Ministry of Land Ordinance No. 1634; checked 28 October 2026). Conversion left to the rule; converted rent within Housing Lease Protection Act Art. 7-2; tenant consent.
- Korean law database — Housing Lease Protection Act Art. 7-2 and Decree Art. 9 — Act (effective 2 January 2026, Act No. 21065) · Decree (effective 1 July 2026, Decree No. 36423). The lower of two rates; 10%; base rate + 2%.
- Not read. The ministry rule under para. 4; the items of Art. 154(1); rulings.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Your tax office or the National Tax Service — how the deadline applies to leases already ended; the para. 4 conditions.
- Bank of Korea — the base rate at signing (we did not read rate notices this time).
Written on 28 October 2026. The content is from the source; the glosses are ours.
