Finance2026-03-269 min read|YRYuri

Korean Capital Gains Tax Guide: Property Tax Rates & Exemptions 2026

Complete guide to Korean capital gains tax on real estate. Learn tax rates, single-home exemption, long-term holding deductions, and multi-home surcharges in 2026.

Korean real estate property sale and capital gains tax documents

Selling property in Korea? Capital gains tax (양도소득세) is one of the largest costs you'll face. Understanding the tax structure — exemptions, deductions, and surcharges — can save you tens of millions of won. This guide covers everything you need to know for 2026.

What Is Capital Gains Tax in Korea?

Capital gains tax is levied on the profit from selling real estate. The taxable amount is calculated as: Sale Price - Acquisition Price - Necessary Expenses = Capital Gain. Tax rates range from 6% to 45% depending on the gain amount, with additional surcharges for multi-home owners in regulated areas.

Single-Home Tax Exemption (1세대 1주택 비과세)

The most important exemption: if you own only one home, have held it for 2+ years (including 2 years of actual residence in regulated areas), and the sale price is 1.2 billion KRW or less, you pay zero capital gains tax. If the sale price exceeds 1.2 billion KRW, only the proportional gain above 1.2 billion is taxed.

One home per household (1세대 1주택)
Held for 2+ years (조정대상지역: 2 years residence required)
Sale price ≤ 1.2 billion KRW: fully exempt
Sale price > 1.2 billion KRW: taxed on proportional excess only

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Long-Term Holding Special Deduction (장기보유특별공제)

For properties held 3+ years, a percentage of the capital gain is deducted before tax calculation. General properties get 2% per year (max 30% at 15+ years). Single-home owners get enhanced rates: up to 80% combined deduction for holding + residence periods.

General: 3 years = 6%, 4 years = 8%, ... 15+ years = 30%
Single-home (holding): 3 years = 12%, 4 years = 16%, ... 10+ years = 40%
Single-home (residence): 3 years = 12%, 4 years = 16%, ... 10+ years = 40%
Single-home combined max: 80% (40% holding + 40% residence)
Multi-home surcharge: no deduction allowed

2026 Tax Rate Brackets

Korea uses progressive tax rates. The tax base (after deductions) determines which bracket applies. Note that each bracket only applies to the portion within that range — not your entire gain.

Up to 14M KRW: 6%
14M - 50M KRW: 15%
50M - 88M KRW: 24%
88M - 150M KRW: 35%
150M - 300M KRW: 38%
300M - 500M KRW: 40%
500M - 1B KRW: 42%
Over 1B KRW: 45%

Multi-Home Surcharges (다주택 중과세)

In regulated areas (조정대상지역), multi-home owners face significant surcharges on top of the base progressive rate. Additionally, they cannot claim the long-term holding special deduction.

2 homes in regulated area: base rate + 20%p surcharge
3+ homes in regulated area: base rate + 30%p surcharge
Short-term holdings: under 1 year = 70% flat rate, 1-2 years = 60% flat rate
Local income tax: additional 10% of capital gains tax

Calculation Example

Example: You bought an apartment for 300M KRW and sell it for 500M KRW after 5 years with 10M KRW in expenses. You own 2 homes but not in a regulated area.

Capital Gain: 500M - 300M - 10M = 190M KRW
Long-term Deduction (14%): 190M × 14% = 26.6M KRW
Taxable Gain: 190M - 26.6M = 163.4M KRW
Basic Deduction: 2.5M KRW
Tax Base: 160.9M KRW
Tax: 160.9M × 38% - 19.94M = 41.2M KRW
Local Tax (10%): 4.12M KRW
Total Tax: ~45.3M KRW (effective rate ~23.8%)

Tax-Saving Strategies

Hold for 3+ years to qualify for long-term holding deduction
Keep receipts for all necessary expenses (remodeling, brokerage, legal fees) to reduce capital gain
If you qualify for single-home exemption, sell while you still have only one home
In regulated areas, consider timing your sale to avoid multi-home surcharges
Use a tax professional for complex situations — the savings often exceed the consultation fee

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Frequently Asked Questions

When do I need to file capital gains tax?

You must report and pay capital gains tax within 2 months of the settlement date (잔금일). For example, if you close on March 15, the deadline is May 31. Late filing incurs penalties of 20% (general) or 40% (intentional under-reporting).

Can I offset losses against gains?

Yes, capital losses from the same tax year can offset gains. However, losses from stocks cannot offset gains from real estate and vice versa. Carry-forward of losses is not allowed for individuals.

What counts as necessary expenses?

Brokerage fees, acquisition tax, judicial scrivener fees, interior/remodeling costs (with receipts), and capital improvements. Regular maintenance and repairs are generally not deductible.

Is the 1.2 billion exemption per person or per household?

Per household (세대). A household is defined as the person, their spouse, and dependent family members sharing the same residence registration. Even if spouses own separate properties, they count as one household.

Do foreigners pay capital gains tax in Korea?

Yes. Both residents and non-residents pay capital gains tax on Korean property. Non-residents may face higher minimum rates and cannot claim the single-home exemption. Tax treaties may provide some relief.