Korea Capital Gains Tax: Complete Guide to Calculation, Exemptions, Deductions & Tax Law

What Is Capital Gains Tax?

One condition can mean the difference between a multi-million won tax bill and zero. Take an apartment bought for ₩600M and sold for ₩1.5B. Whether the seller owes any capital gains tax depends entirely on whether the single-household one-home exemption conditions are met (2+ years ownership, 2+ years residence if in a regulated zone). Qualify, and the ₩1.2B-and-under portion is tax-free; only the excess is taxed. Miss the threshold by even one month and the full gain falls under the standard rate schedule. Before deciding when to sell, always check this first.

Capital gains tax (양도소득세) is a tax on profit (the “transfer gain”) generated when you sell real assets — land, buildings, housing — or shares. In South Korea it is codified under Article 94 of the Income Tax Act, and tax liability arises only when a gain actually exists.

For a market as property-intensive as South Korea’s, capital gains tax is one of the most impactful levies most individuals will ever face. Understanding the single-household one-home exemption and the long-term holding special deduction can legally shave millions — or tens of millions — of won off your bill.

Note for international readers: The tax rates, brackets, exemptions, and statutes below are specific to South Korea. The conceptual framework — taxing the gain, allowing holding-period deductions, and granting primary-home exemptions — exists in many countries, but your jurisdiction’s numbers will be completely different.

---

1. Key Figures (2024 Basis)

---

2. Capital Gains Tax Calculator

🏠

양도소득세 계산기

양도차익 · 장기보유특별공제 · 결정세액 계산

자산 유형

주택토지주식

양도가액 (팔 때)

원

취득가액 (살 때)

원

필요경비 (중개료+취득세 등)

원

보유 기간 (년)

1세대 1주택

※ 다주택자 중과, 조정대상지역 여부는 반영되지 않습니다. 실제 세액은 세무사 상담 또는 국세청 양도소득세 신고 시스템을 이용하세요.

---

3. How to Calculate Your Transfer Gain

The Core Formula

Transfer Gain = Sale Price − Purchase Price − Necessary Expenses
Transfer Income = Transfer Gain − Long-term Holding Deduction
Tax Base = Transfer Income − Basic Deduction (₩2.5M)
Tax Due = Tax Base × Rate + Local Income Tax (Tax × 10%)

What Counts as “Necessary Expenses”?

Category	Examples
Acquisition-related taxes	Acquisition tax, stamp duty
Brokerage commissions	One for purchase, one for sale
Capital expenditures	Balcony enclosure, full heating system replacement, structural improvements
Legal fees	Costs to resolve ownership disputes

---

4. The Single-household One-home Exemption

Calculating Tax on the Portion Above ₩1.2B

When the sale price exceeds ₩1.2B, only the proportional excess is taxed.

Example: Purchased for ₩600M, sold for ₩1.5B, held 5 years, single household one home

• Transfer Gain: ₩1.5B − ₩600M = ₩900M
• Tax-free ratio: ₩1.2B / ₩1.5B = 80%
• Taxable gain: ₩900M × (1 − 0.8) = ₩180M
• Apply long-term holding deduction and basic deduction before computing final tax

---

5. Long-term Holding Special Deduction

The longer you hold, the lower your taxable income.

Category	Holding Period	Deduction Rate
General (land & buildings)	3+ years	6–30% (2% per year from 3 years)
Single household one home	2+ years	4% for ownership + 4% for residence per year (max 80%)

---

6. Tax Rates by Holding Period

Holding Period	Housing Rate	Land & Other Rate
Less than 1 year	70%	50%
1 year to less than 2 years	60%	40%
2+ years	Standard rate (6–45%)	Standard rate

---

7. Multi-home Surcharges

Surcharge rates when reinstated:

Homes Owned	Regulated Zone	Non-regulated Zone
1 home	Standard rate	Standard rate
2 homes	Standard + 10%p	Standard rate
3+ homes	Standard + 20%p	Standard + 10%p

---

8. Filing and Payment Schedule

---

9. Key Statutory Provisions

Income Tax Act Article 94 (Scope of Transfer Income)

Article 94 Transfer income consists of the following types of income arising in the taxable period:

1. Income from transferring land or buildings
2. Income from transferring rights in real property
3. Income from transferring shares or equity interests

Source: National Law Information Center — Income Tax Act

---

Income Tax Act Article 89 (Tax-exempt Transfer Income)

Article 89 The following income is exempt from capital gains tax:

3. A one-household one-home (as defined by Presidential Decree), including attached land, where the actual transaction price at time of sale does not exceed ₩1.2B.

Source: National Law Information Center — Income Tax Act

---

Income Tax Act Article 95 (Transfer Income Amount)

Article 95 Transfer income equals the transfer price (Article 92) less necessary expenses (Article 97) — the “transfer gain” — further reduced by the long-term holding special deduction.

Source: National Law Information Center — Income Tax Act

---

Income Tax Act Article 104 (Capital Gains Tax Rates)

Article 104 Capital gains tax is calculated by applying the following rates:

1. Standard income tax rates (Article 55 §1)
2. Pre-sale contracts: 70% (60% if held 1+ year)
3. Housing held less than 1 year: 70%

Source: National Law Information Center — Income Tax Act

---

Income Tax Act Article 105 (Preliminary Return)

Article 105 A resident who transfers assets under Article 94 §1 items 1 and 2 must file a preliminary capital gains tax return with the competent tax office within 2 months of the end of the month of transfer.

Source: National Law Information Center — Income Tax Act

---

10. Tax Strategy Summary

---

11. Get a More Accurate Estimate

Three things to do before deciding to sell: First, check the registration certificate for your acquisition date and purchase price. Second, verify whether your property is in a regulated zone and confirm your ownership and residence duration to determine exemption eligibility. Third, enter your purchase price, sale price, and holding period in the calculator below for an instant estimate. Missing the preliminary return deadline (last day of the month following sale) triggers a 20% non-filing penalty. Knowing your numbers before signing the sale contract is the single most powerful tax strategy.

---

Further Reading

Related Guides

• Acquisition Tax Guide — The Tax You Pay When Buying Property

---

References

• National Tax Service Capital Gains Tax Filing: https://hometax.go.kr → File/Pay → Capital Gains Tax
• National Law Information Center — Income Tax Act Articles 94–110: https://www.law.go.kr
• Ministry of Land Real Transaction Price System: https://rt.molit.go.kr
• Ministry of Economy and Finance: https://www.moef.go.kr