Korea Capital Gains Tax 2026: How Much on a ₩500M → ₩1B Apartment
Step-by-step guide to Korean capital gains tax on property. Covers 1-home exemption rules, progressive tax brackets, long-term holding deductions, multi-home surcharges, and a real calculation example for selling a ₩1B apartment in 2026.
A friend of mine bought an apartment in Gangnam for ₩500 million back in 2011. Fifteen years later, a similar unit in the complex sold for ₩1 billion. He started shopping for his next home — until his accountant told him the tax bill. Depending on whether he qualified for the single-home exemption, the difference was between paying zero and paying over ₩100 million in capital gains tax.
Capital gains tax on Korean real estate is one of the biggest financial decisions you'll face as a property owner. The rules around exemptions, deductions, and surcharges can swing your tax bill by tens of millions of won. This guide walks through every scenario so you can plan your sale with confidence.
What you'll learn
- ✅How to determine if you qualify for the 1-home tax exemption (and what happens above ₩1.2B)
- ✅How long-term holding deductions can cut your taxable gain by up to 80%
- ✅A step-by-step calculation for selling a ₩500M apartment at ₩1B after 15 years
What Is Capital Gains Tax on Korean Property?
When you sell real estate in Korea for more than you paid, the profit is subject to capital gains tax. The formula is straightforward: Sale Price minus Purchase Price minus Necessary Expenses equals Capital Gain. That gain then gets reduced by any applicable deductions before tax rates kick in.
Tax rates are progressive, ranging from 6% to 45% depending on how large your taxable gain is. Multi-home owners in regulated areas face additional surcharges that can push the effective rate well above 50%. The filing deadline is 2 months from the end of the month you received final payment.
The 1-Home Exemption: How to Pay Zero Tax
The single most valuable tax benefit for Korean homeowners. If your household owns exactly one home, you've held it for at least 2 years, you've lived in it for at least 2 years (required in regulated areas), and the sale price is ₩1.2 billion or less — you pay no capital gains tax at all. Zero.
If the sale price exceeds ₩1.2 billion, only the proportional gain attributable to the amount above ₩1.2 billion is taxed. So selling at ₩1.5 billion doesn't mean all your gain is taxed — just the fraction above the threshold.
- One home per household: your spouse's property counts as yours
- 2+ years of ownership required
- 2+ years of actual residence required in regulated zones
- Sale price at or below ₩1.2 billion: fully exempt
- Sale price above ₩1.2 billion: taxed only on the proportional excess
Try this tool now:
Capital Gains Tax Calculator →Progressive Tax Rate Brackets for 2026
Korea uses a progressive bracket system. Each bracket only applies to the portion of your gain that falls within that range — not your entire gain. Here are the current brackets:
- Up to ₩14M: 6%
- ₩14M – ₩50M: 15%
- ₩50M – ₩88M: 24%
- ₩88M – ₩150M: 35%
- ₩150M – ₩300M: 38%
- ₩300M – ₩500M: 40%
- ₩500M – ₩1B: 42%
- Over ₩1B: 45%
On top of the capital gains tax, you also pay local income tax equal to 10% of your capital gains tax bill. So the real effective rate is always slightly higher than these brackets suggest.
Long-Term Holding Deduction
The longer you hold a property, the bigger the deduction you get from your capital gain before taxes. For general properties (non-single-home), the deduction starts at 6% for 3 years and increases by 2% per year, maxing out at 30% after 15 years.
Single-home owners get a much better deal. They can claim up to 40% for the holding period and another 40% for the residence period, for a combined maximum of 80%. That means if you've lived in your only home for 10+ years, only 20% of your capital gain is actually taxed.
| Holding Period | General Property | 1-Home (Holding) | 1-Home (Residence) |
|---|---|---|---|
| 3 years | 6% | 12% | 12% |
| 4 years | 8% | 16% | 16% |
| 5 years | 10% | 20% | 20% |
| 6 years | 12% | 24% | 24% |
| 7 years | 14% | 28% | 28% |
| 8 years | 16% | 32% | 32% |
| 9 years | 18% | 36% | 36% |
| 10 years | 20% | 40% | 40% |
| 11 years | 22% | 40% | 40% |
| 12 years | 24% | 40% | 40% |
| 13 years | 26% | 40% | 40% |
| 14 years | 28% | 40% | 40% |
| 15+ years | 30% | 40% | 40% |
Multi-Home Surcharges
If you own multiple homes in a regulated area, things get expensive fast. Two-home owners face a 20 percentage point surcharge on top of the progressive rate. Three or more homes means a 30 percentage point surcharge. And you lose access to the long-term holding deduction entirely.
- 2 homes in regulated area: base rate + 20%p
- 3+ homes in regulated area: base rate + 30%p
- Held under 1 year: flat 70% rate regardless
- Held 1–2 years: flat 60% rate
- No long-term holding deduction for surcharged properties
- Local income tax (10% of CGT) still applies on top
Real Calculation: ₩500M Apartment Sold at ₩1B After 15 Years
Let's work through a realistic scenario. You bought an apartment for ₩500 million in 2011 and sell it for ₩1 billion in 2026. You've lived there the entire time as your only home. Necessary expenses (acquisition tax, brokerage, remodeling) total ₩30 million.
Capital Gains Tax Calculation
Because the sale price is ₩1 billion — under the ₩1.2 billion threshold — and the owner qualifies as a single-home household with 15 years of holding and residence, the entire gain is exempt. Not a single won in tax.
Now suppose the same apartment sells for ₩1.5 billion instead. The proportional taxable gain is: (1.5B - 1.2B) / 1.5B × ₩470M = ₩94M. After applying the long-term holding deduction of 80% (40% holding + 40% residence for 15 years): ₩94M × 20% = ₩18.8M taxable. After the ₩2.5M basic deduction, the tax base is about ₩16.3M. The resulting tax would be roughly ₩1.3M — still remarkably low thanks to the combined deductions.
How to protect your 1-home exemption
If you're planning to buy a second property, sell your current home first while you still qualify as a single-home household. Once you own two homes, you lose the exemption entirely. Also confirm your residence registration matches where you actually live — the 2-year residency requirement in regulated areas is checked against your actual address history, not just ownership records. And don't forget: even if you qualify for full exemption, you still need to file a preliminary return within 2 months of settlement.
Multi-home owners and late filing penalties
If you own multiple homes in a regulated area, the surcharges are brutal: base rate plus 20-30 percentage points, with no long-term holding deduction. A ₩200M gain could easily result in ₩100M+ in taxes. On top of that, failing to file within the 2-month deadline triggers a 20% penalty on unpaid tax (40% if the underreporting is deemed intentional), plus daily interest at 0.022%. If you're selling and the situation is at all complicated, consult a tax professional before closing.
Try this tool now:
Calculate Your Capital Gains Tax →Frequently Asked Questions
When exactly is the filing deadline?
You must file and pay within 2 months from the last day of the month in which you received final payment. If settlement is March 15, the month ends March 31, so your deadline is May 31. Mark it on your calendar — missing it means automatic penalties.
My spouse owns a property too. Do we still get the 1-home exemption?
No. A household includes you, your spouse, and any dependents sharing the same residence registration — regardless of who holds the title. If your spouse owns a separate property, your household owns 2 homes, and neither qualifies for the single-home exemption.
What counts as necessary expenses to reduce my gain?
Acquisition tax paid at purchase, brokerage commissions on both purchase and sale, judicial scrivener fees, and capital improvements like major remodeling (with receipts). Regular maintenance, repairs, and interior decoration generally don't qualify.
Can I carry forward a loss from a previous property sale?
No. Korean tax law does not allow individuals to carry forward capital losses from real estate. You can only offset losses against gains within the same tax year, and only within the same asset category — property losses can't offset stock gains and vice versa.
I'm a foreigner owning property in Korea. Do I pay the same rates?
You pay capital gains tax at the same progressive rates, but non-residents face a minimum tax rate of 10% of the sale price (or the standard progressive calculation, whichever is higher). Non-residents also cannot claim the 1-home exemption. Check whether a tax treaty between Korea and your home country provides any relief.
▶Try the tools from this article
Yuri
Real estate & finance editor. Breaking down calculations for homebuying and wealth management.
Found this helpful? Get new guide alerts
No spam. Unsubscribe anytime. · By subscribing, you agree to our Privacy Policy.