Every tax on a Korean property, from purchase to sale
Korea taxes property in four moments: when you buy, every year you hold, when it earns rent, and when you sell. Foreigners pay the same rates at each step; what changes is which exemptions you qualify for, and that depends on residence, not nationality.
- 1. 1. Buying — acquisition tax
- 2. 2. Holding — property tax and comprehensive holding tax
- 3. 3. Renting — income tax on rent
- 4. 4. Selling — capital gains tax
- 5. 5. Gifts and inheritance
- 6. Double-tax treaties
1. Buying — acquisition tax
Paid once, within 60 days of acquisition, to the local government. For a first home: 1% up to KRW 600M, sliding to 3% above 900M, plus local education tax (10% of the rate) and, over 85㎡, 0.2% rural special tax. Second home in a regulated area or third home anywhere: 8%. Third in a regulated area or fourth anywhere: 12%. Foreigners get no surcharge and no discount; the first-time-buyer relief (up to KRW 2M off, homes under 1.2B) is available to foreigners who meet its conditions, though few non-residents do. The acquisition-tax calculator handles all cases.
2. Holding — property tax and comprehensive holding tax
For a typical KRW 700M apartment (assessed about 490M) the annual bill is roughly KRW 600k–900k including surtaxes, and no comprehensive holding tax. Taxes attach to whoever owns the property on 1 June, so a closing in late May shifts the whole year's bill to the buyer.
| Tax | Base | Rate | When |
|---|---|---|---|
| Property tax (재산세) | Official assessed value × 60% (housing) | 0.1–0.4% progressive (0.05–0.35% for one home ≤ 900M) | Billed July (½) and September (½) |
| Local education tax | Property tax amount | 20% of property tax | With property tax |
| Urban area tax | Assessed value × 60% | 0.14% | With property tax |
| Comprehensive holding tax (종부세) | Assessed value above 900M (1.2B for one home) | 0.5–2.7% (up to 5% for 3+ homes) | December |
3. Renting — income tax on rent
Rental income from Korean property is Korean-source income for residents and non-residents alike. Up to KRW 20M a year you can choose separate taxation at 14% on 50% of gross (after a 4M deduction if it is your only income); above that it joins your global income at 6–45%. Jeonse deposits are taxed as deemed rent only for owners of three or more homes. Non-resident landlords file the same May return; a corporate tenant withholds 2% on rent paid to a non-resident.
Two forms follow the lease: register as a rental business (사업자등록) within 20 days of the first lease, and, if you want tax benefits, register the unit as a registered rental home — a long commitment that rarely suits foreign owners.
4. Selling — capital gains tax
Gain = sale price − purchase price − acquisition costs (acquisition tax, agent fees, legal fees, improvements). Tax is 6–45% progressive on the gain after a long-term holding deduction of 6–30% (2% per year from year 3). Homes sold within 1 year are taxed at 70%, within 2 years at 60%, so hold at least 2 years. Local income tax adds 10% of the amount.
The exemption Koreans rely on — no tax on one home worth up to KRW 1.2B held 2 years (with 2 years' residence in regulated areas) — is available only to residents. A non-resident never qualifies, and the enhanced 80% long-term deduction is also residents-only. A resident who becomes a non-resident keeps the exemption if they sell within 2 years of leaving, which is the usual planning point for foreign employees returning home.
If the buyer is a Korean company, it withholds the lesser of 10% of the price or 20% of the gain from a non-resident seller and remits it; the seller settles the difference on the return. Individual buyers do not withhold. File the preliminary return within 2 months of the end of the month of sale.
5. Gifts and inheritance
Gifting a Korean property, or the money to buy one, triggers gift tax on the recipient at 10–50% with a KRW 50M exemption from parents (10-year window). Korean-situs property is taxable regardless of where donor or recipient live. Inheritance of Korean property by a non-resident heir is taxed in Korea on the Korean assets only, with a basic deduction of KRW 200M instead of the 500M residents get. The gift-tax and inheritance-tax calculators use the current tables.
Double-tax treaties
Korea has treaties with the US, China, Japan, the UK, Australia, Singapore and most other countries. They give Korea the first right to tax income and gains from Korean real estate; your home country then credits the Korean tax. Keep the Korean tax receipts — the foreign tax credit at home depends on them.