South Korea – Property Taxes

What taxes and fees apply when purchasing property in South Korea?

The principal tax a buyer must pay in South Korea is acquisition tax (취득세). This tax is levied on the acquisition price of real estate, motor vehicles, construction equipment, golf memberships, boats, and similar assets. For residential property, acquisition tax rates run from 1% to 4% of the acquisition price, shaped by the circumstances of the acquisition, the purchase price, and the nature of the property. Non-residential or general real estate attracts a standard acquisition tax rate of 4%, though specific rates may apply in certain situations. At the upper end of the range, the effective rate can reach as high as 12%.

Two surtaxes are levied alongside acquisition tax: special rural development tax and local education tax. These are applied as supplementary charges on top of the acquisition tax itself, typically adding between 0.2% and 0.6% to the overall cost. For properties located in the Seoul metropolitan or concentrated area, or for luxury assets such as villas, golf courses, and yachts, a weighted rate applies.

Stamp tax in South Korea functions quite differently from the percentage-based stamp duty familiar to buyers in countries such as the UK or Singapore. Stamp tax is charged on anyone who prepares a document evidencing the establishment, transfer, or modification of property rights in Korea, and the amount ranges from KRW 50 to KRW 350,000 depending on the category of taxable document. Because this is a flat document fee rather than a percentage of the property’s value, it represents a negligible share of total purchase costs.

Registration tax becomes payable when ownership is formally registered. In principle, registration tax is subsumed within acquisition tax; however, in some situations a separate registration tax of between 0.2% and 5% is levied on the act of registering the creation, alteration, or extinguishment of property rights. Corporations registering title in a designated metropolitan area may be subject to a registration tax rate three times the normal 0.4% rate.

Professional fees are not set by statute but are typically negotiated. Buyers commonly instruct a certified judicial scrivener (법무사) to manage the registration process, with fees generally falling in the range of KRW 300,000–1,000,000 depending on the complexity of the transaction. Real estate agent fees (부동산 중개수수료) are legally capped and shared between buyer and seller; for residential transactions the ceiling is generally 0.4%–0.9% of the purchase price depending on property value, with each party paying their own agent separately.

VAT can arise in certain scenarios. Where the seller qualifies as an “entrepreneur” under the Value-Added Tax Act, VAT may be applied to the building element of a transaction — land itself is exempt from VAT. This is most commonly relevant for commercial property or newly constructed units being sold by a developer.

Worked example: approximate buyer costs on a KRW 600 million apartment (as of 2025)

Note: buyers who already own one or more homes, or who are acquiring a high-value property, will face significantly higher acquisition tax — potentially 8%–12% — which would substantially increase overall costs. Always verify current rates and thresholds with the Korea National Tax Service.

What taxes and fees apply when selling property in South Korea?

Sellers in South Korea are not liable for acquisition tax, which falls entirely on the buyer. The dominant financial obligation for a seller is capital gains tax (양도소득세), which is examined in detail in the following section. Beyond CGT, sellers ordinarily bear real estate agent fees, which are subject to the same legal caps as those applying to buyers — generally 0.4%–0.9% of the sale price for residential property, depending on its value.

Sellers may also need to retain a certified judicial scrivener or a tax accountant to prepare the capital gains tax return and compile the documentation required for the transfer. Professional fees for this support vary but are typically modest — usually KRW 300,000–700,000 for a straightforward residential transaction.

Capital gains generated from the disposal of real estate are subject to a progressive tax structure. The taxable gain is calculated by subtracting the original acquisition cost, improvement expenditure, and transfer-related costs from the sale proceeds, along with any applicable deductions for long-term ownership. The seller must submit a CGT return to the NTS, ordinarily within two months of the date the transfer takes effect.

Is capital gains tax payable on property sales in South Korea?

Yes. Capital gains tax on property disposals is among the most intricate elements of South Korea’s property tax framework. Gains from the disposal of capital assets form part of an individual’s taxable income but are assessed separately from global income; a basic deduction of KRW 2.5 million per year held and a special deduction for extended retention may apply. Unlike the simpler flat-rate CGT systems found in a number of other jurisdictions, South Korea’s approach applies progressive rates alongside multiple overlapping rules that hinge on how many properties the seller owns, how long the asset was held, and whether it served as the seller’s primary residence.

For residents, capital gains are included within ordinary income and taxed at the applicable progressive income tax rates, which range from 6% to 45% based on the total level of taxable income. An additional 10% local income tax is charged on top of this, meaning the combined effective rate can reach up to 49.5% on very large gains. Sellers who own multiple properties or high-value assets may face further surcharges.

For non-residents, the rules are comparatively straightforward. Non-residents are taxed at whichever is the lower of the following: 10% of the gross sale proceeds (11% once the provincial income tax is included), or 20% of the net capital gain (22% inclusive of the local surtax). Non-residents are liable only in respect of capital gains originating from a South Korean source.

The most significant relief available is the one-household, one-residence (1세대 1주택) exemption. Where a property qualifies for this relief, capital gains tax is fully exempt up to a sale price of KRW 1.2 billion; any portion of the gain attributable to proceeds above that threshold may qualify for up to an 80% special deduction for long-term ownership. This relief broadly mirrors a primary residence exemption, though the conditions — including a minimum ownership period of two years and, in certain designated areas, two years of actual occupation — must be carefully confirmed with the NTS.

Certain capital gains are exempt from taxation for both residents and non-residents, including the disposal of specified categories of farmland and other types of real estate as prescribed by law.

Practical example (as of 2025)

Suppose a resident individual sells a Seoul apartment — their only property — for KRW 1.5 billion. They originally purchased it for KRW 900 million, producing a gross gain of KRW 600 million. Because the sale price does not exceed KRW 1.2 billion in its entirety, only the gain attributable to proceeds above KRW 1.2 billion is subject to CGT. A long-term holding deduction of up to 80% may further reduce the taxable portion of that excess. By contrast, if the seller owned a second home, the full KRW 600 million gain would be exposed to progressive CGT rates. Always confirm current thresholds and deduction percentages with the Korea National Tax Service or a qualified Korean tax adviser.

Are there annual property taxes in South Korea?

South Korea operates a two-tier system of annual property taxation: property tax (재산세), collected by local municipalities, and the comprehensive real estate tax (종합부동산세, CRET), levied by the national government. Both are assessed on an annual basis. Property tax catches most property owners across the country, while CRET is an additional charge that only those with higher-value holdings will encounter.

Property tax (재산세) is the foundational annual levy. It is charged on the statutory value of land, buildings, houses, vessels, and aircraft, at annual rates ranging from 0.07% to 5%, with certain exceptions. For the majority of residential properties, the effective rate falls between 0.15% and 0.50%, depending on the property’s value and category. A further local education tax, equal to 20% of the property tax amount, is charged on top of the underlying property tax figure.

Comprehensive real estate tax (CRET) targets owners whose total property values surpass defined thresholds. Where a person’s real estate holdings exceed those thresholds — broadly KRW 900 million for housing (KRW 1,200 million for sole-property owners) or KRW 500 million for land — an additional comprehensive real estate holding tax of 0.5%–5.0% is levied, along with a special rural development tax equal to 20% of the CRET liability. The tax is calculated solely on the value above the threshold rather than on the total holding. Any property tax already paid may be credited against the CRET amount due.

For comparative purposes, this two-tier structure bears some resemblance to a council tax combined with a mansion tax surcharge, though the Korean system is driven by assessed value rather than property bands as in the UK, and its upper-tier thresholds are more akin to the high-value property levies found in parts of Europe.

Indicative annual tax on a KRW 800 million apartment (as of 2025)

Verify current statutory value assessments and applicable thresholds with the Korea National Tax Service or your local municipal office.

How is rental income from property taxed in South Korea?

Rental income received by individuals in South Korea is treated as global income (종합소득) and taxed at progressive rates. Korea classifies personal income into several streams — global income, retirement income, and capital gains — with global income encompassing real estate rental receipts, business income, and employment income, all of which are subject to progressive taxation.

Rental income is taxable with no nil-rate band specifically for rental receipts; the taxable amount is determined by deducting allowable expenses and losses carried forward from the previous five years from total rental receipts. Deductible costs typically include mortgage interest, property taxes, depreciation, insurance premiums, and maintenance expenditure. For smaller landlords whose annual rental income falls below KRW 24 million, there is the option of computing personal taxable income by applying an estimated expense deduction rate of between 20% and 66% of total receipts for real estate rental businesses — a simplified approach that reduces the record-keeping burden.

Korea runs a self-assessment tax system under which taxpayers are required to file returns and attach supporting documentation for any deductions or exemptions claimed. Rental income must be declared annually within the comprehensive income tax return (종합소득세 신고), which is filed in May covering the previous calendar year.

For non-residents, liability extends only to Korea-sourced income. However, non-residents are not entitled to claim personal exemptions for dependants, income deductions, or tax credits beyond their own personal exemption. Non-residents earning Korean-source rental income will generally be subject to withholding tax, and they must ensure compliance either through deduction at source or by filing directly with the NTS.

Income from short-term rentals — such as those listed on platforms like Airbnb — is similarly treated as rental or business income and exposed to the same progressive income tax rates. That said, operating a short-term rental may also trigger obligations under the Tourism Promotion Act and local regulatory frameworks; Seoul and other major cities have introduced restrictions or registration requirements for short-term letting arrangements. While the tax rate applied does not differ between short-term and long-term rental income, short-term letting may be categorised as a business activity, which could alter the applicable expense deduction methodology and give rise to VAT obligations.

Does inheritance tax apply to property in South Korea?

Yes, South Korea operates a comprehensive inheritance tax regime. The Inheritance and Gift Tax Law governs both inheritance and gift tax; inheritance tax is triggered by the transfer of property without consideration as a consequence of death, or where a person has been declared missing.

Rates run from 10% to 50%, excluding local income tax, applied progressively on the taxable amount. These bands apply broadly as follows (as of 2025 — verify current thresholds with the NTS):

Korean inheritance tax is levied on the estate as a whole rather than per beneficiary as in some other systems, which means large estates can face substantial tax on their aggregate value before any distribution takes place. A range of deductions is available, including a basic deduction, a spousal deduction (which can reach up to KRW 3 billion in certain cases), and deductions for dependants — these can meaningfully reduce the effective rate payable.

For non-residents and foreign heirs, Korean inheritance tax applies to Korean-situated property irrespective of the nationality or residence of either the heir or the deceased. Where the deceased was a Korean tax resident, their worldwide assets may fall within the scope of Korean inheritance tax. Korea has concluded double tax treaties with a number of countries, some of which contain provisions addressing inheritance and gift taxes that may mitigate or eliminate double taxation — seek advice from a locally qualified adviser to determine whether a relevant treaty applies to your circumstances.

No separate estate tax exists alongside inheritance tax in Korea. The inheritance tax return must generally be filed within six months of the date of death, extended to nine months where the deceased or the heir was not resident in Korea.

Does gift tax apply to property transfers in South Korea?

Gift tax is charged where property is transferred with donative intent and the consideration received is less than the market value of the asset gifted. The rates are identical to those for inheritance tax — ranging from 10% to 50%, excluding local income tax, on the taxable amount.

In Korea, gift tax is assessed on the recipient (donee) rather than the donor, which is a meaningful structural distinction compared with jurisdictions such as France or the UK where lifetime gift rules place obligations principally on the giver or the estate. Relationship-based exemptions are available: gifts between spouses benefit from a higher exclusion threshold (KRW 600 million over any 10-year period), while gifts from a parent to an adult child carry an exclusion of KRW 50 million, and gifts to a minor child KRW 20 million, both measured on a cumulative 10-year basis. Always confirm current exemption levels with the Korea National Tax Service.

The relationship between gift tax and inheritance tax is significant. Gift tax is conceived as a complement to inheritance tax; gift tax is not charged where inheritance tax has already been imposed on the same property. Conversely, where gift tax has previously been paid and inheritance tax is subsequently assessed on an estate that includes the gifted property, the gift tax already paid is credited against the inheritance tax liability.

If real estate located in Korea is transferred by way of gift to a non-resident, Korean gift tax still applies. The donee must file a gift tax return within three months of the date of the gift. Given the values that Korean real estate — particularly in major cities — can attain, gift tax can represent a very material cost, and planning advice from a Korean tax professional is strongly recommended before making any property gift.

Are there any tax advantages or incentives for property buyers in South Korea?

A number of reliefs and incentives exist within the Korean property tax system, though the majority are directed at specific categories of buyers or property uses rather than being broadly accessible to all purchasers.

• One-household, one-residence CGT exemption: As outlined above, capital gains tax is fully exempt up to a sale price of KRW 1.2 billion for eligible one-household-one-residence properties, with any gain on proceeds above that ceiling potentially qualifying for a special long-term ownership deduction of up to 80%. This is the most valuable relief available to individual owner-occupiers.
• Long-term holding deductions: A basic deduction of KRW 2.5 million per year held, together with a special deduction for extended retention, may be applied against capital gains. Holding a property for a longer period reduces the taxable gain, effectively rewarding long-term ownership over short-term trading.
• Multi-homeowner temporary CGT exemptions: Temporary exclusions from the CGT surcharge applying to multi-homeowners have been extended, and certain small newly built or developer-unsold homes meeting specific criteria may be acquired by multi-homeowners without triggering CGT surcharges if purchased by 31 December 2027.
• Foreign investment incentives: Foreign investors engaged in qualifying activities may be entitled to an exemption from acquisition tax and property tax on property acquired and held for up to 15 years, as well as exemptions from customs duties, VAT, and individual consumption tax on imported capital goods. These incentives apply primarily to foreign capital-invested companies operating within designated investment zones, not to private individuals purchasing residential property.
• Mortgage interest relief: Residents with a mortgage on their primary residence may be able to deduct mortgage interest from their global income tax liability, subject to conditions relating to loan type, property value, and registration. Check with the NTS for current eligibility requirements.

Do different rules apply to foreign buyers or non-residents purchasing property in South Korea?

Foreign nationals are generally permitted to purchase real estate in South Korea, but there are important procedural requirements to observe, as well as certain restricted zones. Foreigners intending to acquire property situated within specific areas — including military facility protection zones, designated cultural heritage protection areas, and ecological and scenery conservation zones — must obtain government approval before entering into a purchase contract.

For most ordinary residential purchases outside restricted zones, the process involves a post-acquisition reporting obligation rather than prior approval. The buyer is required to notify the relevant local government office (시·군·구청) within 60 days of the contract date under the Act on Acquisition of Real Estate by Foreigners. Failure to comply with this reporting requirement can attract fines.

Where a foreigner indirectly acquires Korean real estate by holding 10% or more of the voting shares of a property-owning company incorporated in South Korea, prior notification and registration under the Foreign Investment Promotion Act is required.

From a tax perspective, foreign buyers are subject to the same acquisition tax rates as Korean nationals for standard residential purchases. That said, a weighted acquisition tax rate applies to acquisitions in the Seoul metropolitan or concentrated area, and to luxury items such as villas, golf courses, and yachts — a rule that applies uniformly to all buyers regardless of nationality. For CGT purposes, non-residents benefit from the simpler flat-rate mechanism described above, being taxed at whichever is the lower of 10% of the gross sale proceeds or 20% of the net gain, plus local surtax.

Foreign buyers should note that South Korea does not currently impose a dedicated foreign buyer surcharge of the kind found in parts of Canada or Australia — there is no blanket additional transaction tax levied solely by reason of the purchaser being a non-national. Nevertheless, the regulatory reporting obligations and the complexity of the CGT framework make it essential to engage a Korean-registered real estate lawyer (법무사 or 변호사) and a certified tax accountant (세무사) for any property transaction. The Korea National Tax Service website includes an English-language section offering guidance tailored to foreign taxpayers.

Frequently asked questions: property taxes in South Korea

Do I need to pay tax in South Korea if I sell a property I bought as a non-resident?

Non-residents disposing of Korean property are taxed at the lower of 10% of the gross sale proceeds (11% including the local surtax) or 20% of the net capital gain (22% with the local surtax included). A capital gains tax return must be filed with the Korea NTS. If a double tax treaty between Korea and your country of tax residence covers property gains, your overall liability may be reduced — consult a Korean tax adviser before completing any sale.

Can I claim the primary residence exemption as an expat?

The one-household, one-residence exemption is accessible to tax residents who satisfy the relevant conditions, including being a single-home household and generally having owned the property for at least two years; in certain regulated areas, two years of actual physical residence is also required. Full exemption applies up to a sale price of KRW 1.2 billion. Non-residents are not eligible to claim this exemption. Individual eligibility should be confirmed with the Korea National Tax Service.

How and when is property tax paid each year?

Property tax is administered by local municipalities while CRET is collected by the national government; both are levied on an annual basis. Property tax on buildings is typically billed in July and September, whereas land property tax is billed in September. CRET is assessed by reference to ownership as of 1 June each year and billed in December. Payment is remitted to the relevant local or national tax authority.

What happens to my Korean property if I become a non-resident?

If you lose Korean tax resident status and subsequently sell the property, you will be taxed as a non-resident on the gain, meaning the flat non-resident CGT rates apply rather than the progressive resident rates. Annual property taxes continue to apply irrespective of your residence status. You should update your registration details with both the local administrative office and the NTS, and consult a local tax adviser well before any anticipated change in residence.

Are there any costs specific to buying a newly built apartment from a developer?

Where the selling developer qualifies as an entrepreneur under Korea’s VAT Act, VAT at 10% may be applied to the building component of the transaction; land is not subject to VAT. Purchasing a new-build from a developer may therefore attract VAT in addition to acquisition tax, materially increasing the overall purchase cost compared with buying a resale property. Always clarify the VAT position with the developer and your legal adviser before exchange of contracts.

Does South Korea have a wealth tax on property?

Korea does not impose a general wealth tax. However, the Comprehensive Real Estate Tax (CRET) operates in a manner similar to a high-value property surcharge, applying to holdings that exceed defined thresholds — broadly KRW 900 million for housing (KRW 1,200 million for sole-property owners) or KRW 500 million for land.

How do I report and pay taxes on my Korean rental income from overseas?

Korean-source rental income received by a non-resident must be reported to the Korea NTS. Withholding tax may be deducted at source by a Korean agent or property manager. Non-residents should also investigate whether their home country taxes the same income and whether a double tax treaty operates to prevent double taxation. South Korea requires taxpayers to file returns with supporting documentation under its self-assessment system. Retaining a Korean-registered tax accountant (세무사) is strongly advisable.

What is the difference between property tax and the comprehensive real estate tax?

Property tax is levied by the local municipality and catches all property owners at comparatively modest rates; the comprehensive real estate tax (CRET) is an additional charge imposed by the national government that applies only to those whose property holdings exceed certain value thresholds — a measure aimed at discouraging speculative accumulation of residential real estate. Both are annual taxes assessed on the statutory value of the property.