The moment you decide to sell a home in Korea, the first question that stops you cold is "how much capital gains tax will I actually owe?" You may have heard that single-home owners are exempt, but a quick search turns up terms like the 1.2 billion KRW threshold and long-term holding deductions, and if you happen to own two homes, a surtax gets layered on top. To make things more complicated, the multi-home surtax suspension that had been in place for several years ended in 2026, so the calculation now works differently than it did just a year ago — relying on outdated information can leave you facing a much larger bill than expected.
This guide walks through how Korean capital gains tax (yangdo-soduk-se) is calculated step by step, works through concrete numeric examples, and covers the three situations people search for most: the one-home exemption, temporary two-home ownership, and multi-home surtax. The figures below reflect Korea's National Tax Service (NTS) rules as of July 2026; because eligibility depends on your specific acquisition and residency history, always confirm the final number on Hometax or with a tax professional before filing.
1. Why Selling a Home Makes the Tax Calculation Complicated
Capital gains tax on real estate isn't a single multiplication — it's a chain of deductions and eligibility checks that all have to be resolved in order.
- You start from the capital gain, then subtract the long-term holding deduction — but the deduction schedule you use depends entirely on whether you qualify as a one-home household.
- Even as a one-home household, if the sale price exceeds 1.2 billion KRW, only the portion above that threshold is taxed.
- If you held the property for less than two years, you lose the deduction entirely and face a short-term surtax of up to 70%.
- If you own two or more homes and the property sits in a government-designated "adjusted area," the multi-home surtax has applied again since May 9, 2026.
In short, the exact schedule that applies to you depends on how many homes you own, how long you held and lived in this one, and whether it's located in a regulated area — so knowing a single tax rate isn't enough to estimate your bill accurately.
2. The Calculation Structure: From Capital Gain to Final Tax
Korean capital gains tax is calculated in five steps.
- Calculate the capital gain: Sale price minus acquisition price minus deductible expenses (brokerage fees, acquisition tax, capital improvements, etc.).
- Pro-rate for high-value homes (if over 1.2 billion KRW): For a one-home household selling above 1.2 billion KRW, only a portion of the gain is taxable, calculated as
capital gain × (sale price − 1.2 billion KRW) ÷ sale price. The gain attributable to the first 1.2 billion KRW is excluded from taxation entirely. - Apply the long-term holding deduction: The deduction rate depends on your holding period (and residency period).
- General schedule (multi-home owners, one-home sellers who don't qualify for the special schedule): 2% per year starting at 3 years held, capping at 30% at 15 years or more.
- One-home special schedule (applies to the portion above 1.2 billion KRW, only if you lived in the home at least 2 years): 4% per year of holding (up to 40% at 10+ years) plus 4% per year of residency (up to 40% at 10+ years), combining for a maximum of 80%.
- If the 2-year residency requirement isn't met, a high-value one-home sale falls back to the general schedule (max 30%).
- Derive the tax base: Subtract the annual basic deduction (2.5 million KRW, once per year) from the amount after the holding deduction.
- Apply the tax rate: For holdings of 2+ years, apply the progressive bracket rate and subtract that bracket's cumulative deduction. For holdings under 2 years, apply the flat short-term rate instead.
Because any one of these five steps can shift depending on your eligibility, the first thing to determine is which schedule actually applies to your situation.
3. Worked Examples: Comparing Rates
Basic Progressive Rate Table (2+ years held, current since 2023)
| Tax Base | Rate | Cumulative Deduction |
|---|---|---|
| Up to 14M KRW | 6% | - |
| 14M–50M KRW | 15% | 1.26M KRW |
| 50M–88M KRW | 24% | 5.76M KRW |
| 88M–150M KRW | 35% | 15.44M KRW |
| 150M–300M KRW | 38% | 19.94M KRW |
| 300M–500M KRW | 40% | 25.94M KRW |
| 500M–1,000M KRW | 42% | 35.94M KRW |
| Over 1,000M KRW | 45% | 65.94M KRW |
Rate Comparison by Holding Period and Number of Homes
| Holding Period | One-Home Owner (nationwide) | Adjusted-Area 2-Home Owner | Adjusted-Area 3+ Home Owner |
|---|---|---|---|
| Under 1 year | 70% | 70% | 70% |
| 1–2 years | 60% | Greater of 60% or (base rate + 20pp) | Greater of 60% or (base rate + 30pp) |
| 2+ years | Base rate (6–45%) | Base rate + 20pp (no holding deduction) | Base rate + 30pp (no holding deduction) |
Example 1. One-Home Exemption, Taxable Portion Above 1.2B KRW (10 years held, 10 years resided)
Suppose you bought a home for 600 million KRW, sold it for 1.5 billion KRW (a 900 million KRW gain, expenses simplified out), and held and lived in it for 10 years.
- Taxable portion of the gain = 900M × (1,500M − 1,200M) ÷ 1,500M = 180M KRW
- Long-term holding deduction (80%) = 180M × 0.8 = 144M KRW
- Gain after deduction = 180M − 144M = 36M KRW
- Tax base = 36M − 2.5M (basic deduction) = 33.5M KRW
- Falls in the 14M–50M KRW bracket (15%, cumulative deduction 1.26M) → tax owed = 33.5M × 0.15 − 1.26M = approximately 3.76M KRW
The first 1.2 billion KRW is exempt outright, and the deduction on the remainder — thanks to long holding and residency — keeps the effective rate remarkably low.
Example 2. Adjusted-Area 2-Home Owner Subject to Surtax (3 years held)
Suppose you bought a home for 400 million KRW in an adjusted area, sold it for 800 million KRW (a 400 million KRW gain) after 3 years, while owning a second home. Because this sale is subject to the surtax, no long-term holding deduction applies.
- Tax base = 400M − 2.5M (basic deduction) = 397.5M KRW
- Falls in the 300M–500M KRW bracket: base rate 40% plus a 20pp surtax = 60%, cumulative deduction 25.94M
- Tax owed = 397.5M × 0.6 − 25.94M = approximately 212.56M KRW
Even with an identical 400 million KRW gain, the tax owed by an exempt one-home seller versus a surtaxed two-home seller differs enormously.
4. Situational Guide
One-Home Exemption: Check the 1.2 Billion KRW Threshold First
A one-home household that has held the property for at least 2 years is exempt from capital gains tax on sale prices up to 1.2 billion KRW. However, if the property was located in a government-designated adjusted area at the time you acquired it, you must also have lived in it for at least 2 years to qualify. Since the October 15, 2025 policy update, all 25 districts of Seoul plus 12 areas in Gyeonggi Province (Gwacheon, Gwangmyeong, Seongnam's Bundang/Sujeong/Jungwon, Suwon's Yeongtong/Jangan/Paldal, Anyang Dongan, Yongin Suji, Uiwang, and Hanam) are designated adjusted areas, so if you recently acquired a home in one of these areas, double-check the residency requirement. Any amount above 1.2 billion KRW is taxed separately, as shown in Example 1 above.
Temporary Two-Home Ownership: Dispose of the Old Home Within 3 Years
If you buy a new home before selling your existing one, you can still treat the old home as your "one home" for exemption purposes, provided all of the following are met:
- The new home is acquired at least 1 year after you acquired the existing home
- The existing home has been held for at least 2 years (plus the residency requirement if it was acquired in an adjusted area)
- The existing home is sold within 3 years of acquiring the new home
Since 2023, this 3-year window has been unified nationwide regardless of region, simplifying the calculation compared to prior years. But missing the deadline by even a day forfeits the exemption entirely — you'll be taxed as a two-home owner — so tracking the date carefully matters.
Multi-Home Surtax: The Suspension Ended on May 9, 2026
The multi-home surtax had been suspended since May 10, 2022 as a temporary measure, but that suspension ended on May 9, 2026. As of July 2026, multi-home owners selling property in an adjusted area once again face the surtax (base rate + 20pp for two homes, + 30pp for three or more) along with the loss of the long-term holding deduction. To soften the transition, the government carved out an exception: if you signed a sale contract by May 9, 2026 and complete the transfer within 4 months of the contract date (6 months for areas newly designated on October 16, 2025), the surtax does not apply. If the property is outside an adjusted area, the base rate applies regardless of how many homes you own — so the first thing to check is whether your property falls inside a currently designated area.
5. Frequently Asked Questions (FAQ)
Q1. When is the capital gains tax filing deadline?
You must file and pay the preliminary return through Hometax within 2 months of the end of the month in which the sale closed. Missing the deadline adds both a failure-to-file penalty and a late-payment penalty, so it's worth marking the filing deadline on your calendar as soon as you know the closing date.
Q2. If I qualify for the one-home exemption, do I still need to file?
If the sale price is 1.2 billion KRW or less and the gain is fully exempt, there is generally no separate filing obligation. However, if the sale price exceeds 1.2 billion KRW, you must still file a preliminary return for the taxable portion above that threshold.
Q3. What happens if I miss the 3-year window for temporary two-home ownership?
The exemption no longer applies, and you're taxed as a two-home owner as of the sale date. If the property being sold sits in an adjusted area, the multi-home surtax may apply as well, substantially increasing your tax bill.
Q4. Is the multi-home surtax still suspended right now?
No. The suspension that had been in effect since 2022 ended on May 9, 2026. Contracts and sales after that date are once again subject to the surtax if the property is in an adjusted area. The one exception is if you completed the sale contract by the May 9 deadline and transfer within the specified window — so it's important to verify both your contract date and closing date carefully.
6. Estimate Your Tax Instantly with a Capital Gains Tax Calculator
Manually working through the acquisition price, sale price, holding period, and surtax eligibility leaves a lot of room for error at each bracket boundary. Our Capital Gains Tax Calculator lets you enter the acquisition price, sale price, and holding period to instantly get an estimate that factors in the long-term holding deduction and the correct rate bracket. If you're in the process of buying a new home, check our Acquisition Tax Calculator as well, and once you own the property, our guide on how apartment property tax is calculated covers the annual tax that follows — together they cover the full real estate tax timeline from purchase to sale.
