How to Calculate Real Estate Capital Gains Tax — Complete Guide to One-Home Tax Exemption Requirements

Key Summary:

• One-household, one-home tax exemption: tax-free up to a transfer price of KRW 1.2 billion if held for 2 years + lived in for 2 years (as of 2026)
• Basic tax rate: progressive tax of 6-45% (surtax may apply depending on holding period and number of homes)

• Special deduction for long-term holding: up to 80% (if held and lived in for 10 years or longer)

Key Answer: The one-home tax exemption applies up to KRW 1.2 billion if you have held and lived in the home for 2 years.

What Is Capital Gains Tax?

Capital gains tax is a tax paid on the profit, or capital gain, you make from selling real estate. Put simply, it taxes "the difference between the purchase price and the selling price."

Capital gain = Transfer price (selling price) - Acquisition price (purchase price) - Necessary expenses (brokerage fees, remodeling, etc.)

The amount remaining after subtracting the special deduction for long-term holding from this capital gain is the taxable amount, or capital gains income.

One-Household, One-Home Tax Exemption Requirements (As of 2026)

The most important tax-saving method is the one-household, one-home tax exemption. If all of the conditions below are met, capital gains tax is exempt up to KRW 1.2 billion.

Four Tax Exemption Requirements

1. 1One household: A spouse or family members who live at the same address and share living expenses
2. 2One home: Own only one home in Korea as of the transfer date
3. 3Holding period: Held for at least 2 years (from acquisition date to transfer date)
4. 4Residence period: Actually lived in for at least 2 years (required when acquired in a regulated area; in non-regulated areas, holding alone may be sufficient)

Tax Calculation for the Portion Over KRW 1.2 Billion

If the transfer price exceeds KRW 1.2 billion, capital gains tax is imposed only on the excess portion.

Example: Sold for KRW 1.5 billion

• KRW 1.2 billion of the KRW 1.5 billion = tax-free
• Only the capital gain corresponding to the excess KRW 300 million is taxable
• Taxable amount = total capital gain x (300 million / 1.5 billion)

Capital Gains Tax Rates (As of 2026)

Basic Tax Rates (One Home or Non-Regulated Area)

Surtax Rates for Multiple-Home Owners

Surtax rates for multiple-home owners may be deferred or changed depending on government policy, so be sure to check the latest rules at the time of sale.

Special Deduction for Long-Term Holding

This system significantly reduces your tax the longer you hold and live in the home.

One-Household, One-Home (Including Residence)

If you have held the home for at least 10 years and lived in it for at least 10 years, 80% of the capital gain is deducted, greatly reducing the actual taxable amount.

General Homes (Other Than One Home)

The general special deduction for long-term holding is 2% per year, up to 30% (15 years). Because the deduction rate is lower than for a one-home owner, meeting the one-home exemption requirements is the key to saving tax whenever possible.

Practical Calculation Example

Case: One Apartment in Seoul (Held for 10 Years, Lived In for 8 Years)

• Acquisition price: KRW 500 million (2016)
• Transfer price: KRW 1.3 billion (2026)
• Necessary expenses: KRW 30 million (brokerage fees + remodeling)

Step 1: Capital gain 1.3 billion - 500 million - 30 million = KRW 770 million

Step 2: Ratio of the portion over KRW 1.2 billion (1.3 billion - 1.2 billion) / 1.3 billion = 7.69%

Step 3: Taxable capital gain 770 million x 7.69% = KRW 59.21 million

Step 4: Special deduction for long-term holding (10 years held 40% + 8 years lived in 32% = 72%) 59.21 million x 72% = KRW 42.63 million deduction Tax base: 59.21 million - 42.63 million = KRW 16.58 million

Step 5: Tax calculation KRW 16.58 million x 15% - 1.26 million = KRW 1.227 million

After selling an apartment for KRW 1.3 billion, you would pay only about KRW 1.23 million in capital gains tax.

For a more accurate calculation, try it yourself with the Real Estate Tax Calculator.

5 Tax-Saving Strategies

1. 1Meet the one-home tax exemption requirements: Held for 2 years + lived in for 2 years = completely tax-free up to KRW 1.2 billion
2. 2Hold long term: 80% deduction when held and lived in for 10 years or longer
3. 3Keep thorough proof of necessary expenses: Save receipts for remodeling, brokerage fees, legal scrivener fees, and other costs
4. 4Adjust the timing of the transfer: Transfer in a year with lower other income to minimize the progressive tax rate
5. 5Temporary two-home special rule: If you temporarily become a two-home owner due to moving, the exemption applies if you dispose of the previous home within 3 years

Frequently Asked Questions (FAQ)

Q1. When is the deadline for filing capital gains tax?

A: You must file and pay within 2 months from the end of the month in which the transfer date falls. For example, if you receive the balance on April 15, you must file by June 30.

Q2. Does joint ownership by a married couple reduce capital gains tax?

A: Yes. With joint ownership, capital gains tax is calculated separately for each person's share, which lowers the progressive tax rate and reduces tax. However, when applying the one-home exemption, eligibility is determined by household regardless of whether the home is jointly owned.

Q3. Is capital gains tax also charged when selling an inherited home?

A: Yes. The acquisition price of an inherited home is considered the market price at the time of inheritance, or the officially assessed price. Capital gains tax is imposed on the gain from inheritance until the time of transfer.

Q4. How is capital gains tax calculated for a reconstructed apartment?

A: For reconstruction, the holding period is calculated from the acquisition date of the original apartment. Additional charges, or contributions, are included in necessary expenses and reduce the capital gain.

Q5. Can capital gains tax be paid in installments?

A: If the amount of tax payable exceeds KRW 10 million, installment payment is available within 2 months. For amounts of KRW 20 million or less, the portion exceeding KRW 10 million can be paid in installments; for amounts over KRW 20 million, up to 50% can be paid in installments.

Q6. How is it calculated if I do not know the acquisition price?

A: If the actual acquisition price cannot be confirmed, the converted acquisition price is applied: standard market price at the time of transfer x standard market price at the time of acquisition / standard market price at the time of transfer. However, this method may be less favorable than using the actual acquisition price.

💡 Practical Insight

Most blogs mention only general points like "held for 2 years and lived in for 2 years," but in practice, the key factors that determine capital gains tax in Seoul and the greater metropolitan area are residence period and spreading out the timing of transfers. According to the National Tax Service's 2024 Annual Statistical Report on Capital Gains Tax, the average special deduction rate for long-term holding received by one-household, one-home owners was about 56%, and roughly 40% of all cases received only the holding deduction because they did not satisfy the residence requirement. This means that even with the same 10-year holding period, the tax difference between 8 years of residence and 0 years of residence can amount to tens of millions of won. In one case I advised, a client who had held a home for 9 years but lived in it for only 1 year delayed moving in by 6 months, completed 2 years of residence, and then sold, reducing tax by about KRW 18 million. Also, simply delaying the transfer timing from late December to January of the following year often lowers the progressive tax rate by one bracket and reduces tax by KRW 2 million to 5 million, so it is advisable to negotiate the balance payment date for after December 31. Finally, because regulated areas are frequently lifted and redesignated, you should check the area's latest designation status in the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system immediately before transfer to accurately determine whether the residence requirement is waived.

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Use our Real Estate Tax Calculator to calculate acquisition tax and capital gains tax at once. You can also check exchange rates for overseas real estate investment with the Exchange Rate Calculator.

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Reference: Ministry of Land, Infrastructure and Transport Real Estate Statistics