Finance2026-04-239 min read|YRYuri

Selling a Korean Apartment for 900M Won: How the Capital Gains Tax Actually Breaks Down

A client of mine sold his Gangnam apartment for 900 million won in profit and ended up paying 0 won in capital gains tax. Here's exactly how the single-home exemption, long-term holding deductions, and multi-property surcharges work in 2026.

Property sale documents with capital gains tax calculation on a desk

Last spring a client walked into my office holding a contract for a 900 million won sale. He was bracing for a tax bill somewhere north of 100 million. Two weeks later, after we ran the numbers properly, he walked out owing zero. Not a discount, not a deferral — actually zero. Same property, same gain, but the tax code treats 1세대1주택 households so differently from multi-property owners that the gap between the two outcomes is almost surreal.

Capital gains tax in Korea has a reputation for being complicated, and that reputation is earned. The rate can swing from 0% to over 70% depending on exactly how many homes you own, how long you've held them, whether they're in regulated areas, and how long you lived in them. Getting the classification right saves more money than any investment you could make in the meantime. This guide lays out the rules that actually determine your bill.

What you'll learn in this guide

✅The single-home exemption that can legally reduce your capital gains tax to zero
✅How long-term holding deductions scale from 6% to 80% with years of ownership
✅The 20-30 percentage point surcharge that hits multi-property owners in regulated areas

What Is Capital Gains Tax (양도소득세)?

Capital gains tax is levied on the profit you make from selling real estate, stocks, or other assets. For Korean property, the taxable gain is calculated as: Sale Price - Acquisition Price - Necessary Expenses - Special Deductions. The resulting amount is then taxed at progressive rates ranging from 6% (for gains under 14 million won) to 45% (for gains over 1 billion won). Additional surcharges apply for multiple property owners and short-term holdings, pushing effective rates even higher.

Calculation Steps

Step 1: Determine the transfer price (양도가액) - the actual sale price of the property.
Step 2: Determine the acquisition price (취득가액) - original purchase price plus acquisition tax, broker fees, and other costs.
Step 3: Calculate necessary expenses (필요경비) - capital improvements, renovation costs, legal fees incurred during ownership.
Step 4: Calculate the gain: Transfer Price - Acquisition Price - Necessary Expenses = Capital Gain.
Step 5: Apply long-term holding special deduction (장기보유특별공제) based on holding period.
Step 6: Subtract the basic deduction (기본공제) of 2.5 million won per year.
Step 7: Apply the progressive tax rate to the taxable amount.

Long-Term Holding Special Deduction (장기보유특별공제)

This is the most powerful tax-saving tool for property sellers. For properties held over 3 years, you receive deductions on the capital gain. The deduction rate increases with holding period: 3 years gives 6% (general property) to 12% (primary residence), scaling up to 30% for 15+ years (general) or 80% for 10+ years of primary residence. For 1세대1주택 (single-home households), the deduction is calculated on both holding period and residency period, with maximum combined deduction reaching 80%.

Single-Home Exemption (1세대1주택 비과세)

The most valuable tax benefit in Korean property taxation: if you own only one home, have held it for 2+ years, and have lived in it for 2+ years (in regulated areas), you are completely exempt from capital gains tax on gains up to 1.2 billion won. For gains exceeding 1.2 billion won, only the excess portion is taxed. To qualify, you must meet all conditions at the time of sale, including ownership and residency requirements, and not own any other residential property.

Multi-Property Owner Surcharges (다주택 중과세)

Owners of multiple properties in regulated areas face heavy surcharges. As of 2026, two-home owners face a 20 percentage point surcharge on top of the basic tax rate, and three-or-more-home owners face a 30 percentage point surcharge. A property with a basic rate of 40% would be taxed at 60% for a two-home owner or 70% for a three-home owner. These surcharges also eliminate eligibility for the long-term holding special deduction, making the effective tax burden even higher.

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Tax-Saving Strategies

Hold for 3+ years to qualify for long-term holding deductions. Each additional year increases the deduction rate.
Maintain primary residence status by actually living in the property for 2+ years.
Keep all receipts for capital improvements and renovations—these reduce your taxable gain.
Consider timing: sell during years when your other income is lower to benefit from lower progressive rates.
For multi-property owners: consider selling in sequence to reduce to single-property status before selling the most valuable property.
Document all acquisition costs including broker fees, legal fees, and acquisition tax for maximum deductions.

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Document every expense that can be deducted

Keep receipts for every capital improvement, renovation, and acquisition cost — broker fees, legal fees, acquisition tax, and major repairs. These all reduce your taxable gain dollar-for-dollar. A 30 million won renovation you can document is a 30 million won reduction in your taxable base. Owners who toss receipts end up paying tax on phantom gains. Save digital copies, organize by year, and hand them to your accountant before you sign the sale contract.

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Multi-property status can push your rate from 40% to 70%+

The 20-30 percentage point surcharge on multi-property owners in regulated areas is often the single biggest determinant of your tax bill. Worse, the surcharge eliminates your eligibility for the long-term holding special deduction. If you own two or three homes in a regulated area, selling in the 'wrong' order can cost you tens of millions of won. Consult a tax professional before any multi-property sale — the strategy of which home to sell first is not obvious.

Frequently Asked Questions

How do I qualify for the single-home exemption?

You must own only one home nationally at the time of sale, have held it for 2+ years, and (in regulated areas like most of Seoul) have actually lived in it for 2+ years. If you own any other residential property — including a small one registered to a parent at your address — the exemption is voided.

Does the long-term holding deduction apply to all properties?

Yes for single-home households, but multi-property owners in regulated areas are disqualified from the long-term holding special deduction entirely. This is a major reason the effective tax rates for multi-property owners are so high — they lose the single biggest deduction.

What counts as 'necessary expenses' I can deduct?

Capital improvements (extensions, major renovations), legal fees, broker fees on both acquisition and sale, acquisition tax, and registration fees. Ordinary maintenance (painting, minor repairs) does NOT count. Keep itemized receipts and invoices — the tax office rejects undocumented claims.

When is the best time to sell to minimize tax?

If you're close to the 3-year, 5-year, 10-year, or 15-year thresholds, wait until you cross the threshold — the deduction rate jumps meaningfully. Also consider selling in a year when your other income is lower, since capital gains tax is calculated separately but the overall progressive rate can vary with total income in some cases.

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