Buying property in Korea: acquisition, holding and capital gains taxes explained

This guide is for expats living in Korea, foreign investors, and anyone thinking about buying residential property here. The one-sentence answer: Korea taxes property at every stage — when you buy (acquisition tax), while you own it (property tax and, above a threshold, comprehensive real estate tax), and when you sell (capital gains tax). The rates depend on how many homes you own and what the property is worth, and the rules have been changing quickly.

Calculator: Jeonse to Monthly Rent Calculator — convert a jeonse deposit into monthly rent at Korea’s legal 5.0% cap.

How it works

Korea applies three distinct layers of property tax. Understanding each layer separately makes the system much easier to follow.

Layer 1: Acquisition tax (취득세, chwideukse)

Acquisition tax is a one-time local tax you pay when you buy property. The rate depends on the purchase price and how many homes your household already owns. For a first home, the standard rate runs from 1% to 3% of the purchase price, graduated by price band. The 1.2 billion won threshold for the “luxury home” (고급주택, gogeup jutaek) surcharge was raised in 2026 reforms, meaning fewer buyers face the elevated rate. Buyers in that luxury bracket pay an additional 8 percentage points on top of the standard rate. Second-home buyers in government-designated regulated zones (투기과열지구, tugi gwayeol jigu — areas officially labelled as overheating) face an 8-percentage-point surcharge; third-home-or-more buyers face a 12-percentage-point surcharge. Temporary two-home status — for example, when you buy a new home before selling the old one — has its own grace period, shortened to two years in 2026.

Layer 2: Holding taxes (재산세 and 종합부동산세)

Every property owner pays property tax (재산세, jaesanse), a local tax collected by your local government. It is assessed on a public price (공시가격, gongsigagyeok) — an official government valuation that is typically below the market price — multiplied by a 60% fair-market-value ratio. The resulting tax base is taxed at a progressive schedule. In addition, owners whose total publicly announced home value exceeds a high threshold also pay comprehensive real estate tax (종합부동산세, jonghap budongsan se), known as CRET or jongbuse, a national tax collected by the National Tax Service (NTS). Both taxes are assessed as of 1 June each year.

Layer 3: Capital gains tax (양도소득세, yangdo sodeuktse)

When you sell, any profit is subject to capital gains tax. The base rate for individuals follows the ordinary income tax schedule, ranging from 6% to 45%, plus a 10% local income tax surcharge on top of that amount. Owners of one home who have held it for at least two years are generally exempt from capital gains tax, subject to a price ceiling. Owners of two homes face a 20-percentage-point surcharge on top of the basic rate; owners of three or more homes face a 30-percentage-point surcharge, pushing the maximum effective rate to about 82.5% (including the local income tax). As of September 2026, multi-home surcharges in regulated zones are temporarily eased through 2028.

Why Korea does it this way

Korea’s property tax system reflects decades of tension between rapid urbanisation and housing affordability. Seoul’s metropolitan area holds roughly half the country’s population, and demand consistently outpaces supply. Successive governments — regardless of political orientation — have tried to cool speculation through the tax code rather than purely through construction supply.

The CRET was introduced in 2005 specifically to tax large or multiple property holdings at a national level, supplementing the local property tax. Rates were sharply raised around 2020–2021 and then partially rolled back in 2022–2023. As of 2026, a major reform is under way: the tax base is shifting from the number of homes owned to the combined value of all properties. This reform, announced in July–August 2026, is intended to reduce the burden on owner-occupiers while increasing it on high-value and investment holdings. Most of the new rate structure takes effect on 1 January 2027.

The one-home capital gains exemption reflects a long-standing policy goal of protecting owner-occupiers from being taxed out of homes they actually live in. The 2026 reform tightens this by making future deductions residence-based (requiring actual habitation, not just ownership), with changes phased in through 2029.

The numbers that matter

What it means for you

First-time buyers and owner-occupiers

If you are buying your first home and intend to live in it, Korea’s tax system is designed to be relatively light on you. Your acquisition tax is 1–3%. If your property’s public price stays below ₩1.2 billion (around ₩2 billion in market value for many areas), you will not owe CRET. After two years of ownership you qualify for the one-home capital gains exemption when you sell. Concrete steps: confirm the public price (공시가격) of any property you consider before making an offer — you can look it up on the Ministry of Land, Infrastructure and Transport (MOLIT) portal. Factor acquisition tax into your upfront costs.

Foreign residents and investors

Foreigners can generally buy property in Korea, but the rules tightened significantly in 2025–2026. From 26 August 2025, all 25 districts of Seoul, 23 cities and counties in Gyeonggi Province, and seven districts of Incheon were designated as Foreign Land Transaction Permit Zones (외국인 토지거래허가구역). In these zones, a foreign buyer — regardless of visa type — must obtain government approval from the relevant local government office before signing any contract for a residential property. After purchase, the buyer must move in within four months and live there for at least two years. This designation was set as a one-year trial (through 25 August 2026); check with MOLIT for the current status. Foreign buyers must also: (1) report the acquisition to the local government within 60 days of the contract date under the Act on Reporting Real Estate Transactions; and (2) report any inward remittance of funds to a designated foreign-exchange bank under the Foreign Exchange Transactions Act (외국환거래법) before transferring money. The bank issues a foreign-exchange transaction confirmation that you will need for property registration and, later, for repatriating sale proceeds. Since February 2026, the transaction report also requires disclosure of visa status, overseas bank deposits, and any foreign loans used. Failure to report can result in fines and may make it impossible to repatriate sale proceeds.

Multiple-home holders

If you already own property in Korea and consider buying another, model the full tax stack before deciding. Acquisition tax surcharges, higher CRET rates, and capital gains surcharges stack up quickly. The temporary relief on capital gains surcharges in regulated zones runs through 2028, but is subject to change. The 2027 CRET reform shifts the basis to combined value, which may increase or decrease your bill depending on the total publicly assessed value of everything you own.

FAQ

Do foreigners pay higher property taxes than Korean citizens?

No. The acquisition, property, CRET, and capital gains tax rates are the same for foreigners and Korean nationals. What differs is the reporting process and, in designated zones, the need for a purchase permit before signing. Non-resident owners of a single home also face a lower CRET threshold (₩1.2 billion) than resident owner-occupiers (on track to be ₩1.4 billion under proposed 2027 rules).

What is the “public price” (공시가격) and why does it matter?

The public price (gongsigagyeok) is an official government valuation of a property published annually by MOLIT. It is used as the basis for property tax and CRET calculations. It is typically well below the actual market price. Whether you cross the CRET threshold or qualify for certain exemptions depends on this number, not the price you paid or the market value.

The rules keep changing — how do I stay up to date?

Korea’s property tax legislation changes frequently, sometimes within a single year. The authoritative sources are: the National Tax Service (nts.go.kr) for CRET and capital gains tax; the Ministry of Interior and Safety (mois.go.kr) for local property and acquisition tax; and MOLIT (molit.go.kr) for transaction reporting and foreign land permits. For any transaction, get written advice from a Korean tax accountant (세무사, semusa) or licensed real estate attorney before signing.

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