Real Estate Tax for Foreigners
Buying tax rates do not depend on nationality. But residency status (resident vs non-resident) heavily affects capital gains tax and rental income tax. This page summarizes what changes for foreigners.
Resident vs Non-resident — the key distinction
Korean tax law applies tax rates based on Korean residency, not citizenship. Under the Income Tax Act Art. 1-2, you are a resident if you have an address or 183+ days of residence in Korea in a tax year. Otherwise, you are a non-resident.
- Foreign citizens who live in Korea (with F-2/F-5/F-6 etc.) generally meet the resident test and are taxed like Korean nationals.
- Foreign citizens who buy Korean property while living abroad are typically non-residents, and lose certain exemptions (notably the 1-home capital gains exemption).
1) Acquisition tax — at purchase
Set by the Local Tax Act (Art. 11, 15). The same rates apply to foreigners as to Koreans. Citizenship does not change the rate; the number of homes owned globally by the household does.
- 1 home, ≤ KRW 600M: 1.0%
- 1 home, KRW 600M-900M: progressive 1.0-3.0%
- 1 home, > KRW 900M: 3.0%
- 2nd home in a regulated area: 8.0%
- 3+ homes (or 2nd home in regulated for some cases): 12.0%
- +0.2% rural special tax if floor area > 85 m²; +0.1-0.4% education tax (varies)
For non-residents, the "home count" includes properties held outside Korea where they would qualify for taxable treatment — confirm with a tax accountant for your case.
Try the acquisition tax calculator →
2) Holding tax — yearly
- Property tax (재산세) — Levied yearly on June 1 owner. Rates 0.1-0.4% of the publicly assessed value (공시가격), depending on the property type. Same for foreigners.
- Comprehensive real estate tax (종합부동산세) — Federal-level, applied to high-value or multi-property owners. Tax base is published value above thresholds (currently KRW 1.2B for single home, KRW 900M otherwise). Rates 0.5-5% depending on number of homes. Foreigners are subject under the same rules.
3) Capital gains tax — at sale
This is where foreigners typically pay more.
- Residents (incl. foreigner-residents) — Same progressive rates (6-45%) as Koreans. The 1-home exemption (up to KRW 1.2B sales price, with 2-year holding) applies if the foreigner is the household's sole homeowner and meets residency.
- Non-residents — Income Tax Act Art. 121: the 1-home exemption does NOT apply. The full gain is taxed regardless of how long the property was held in their sole name. Long-term holding deduction (장기보유특별공제) still applies under standard schedule (up to 30%).
- Short-term holding surcharge — Same for everyone: 70% if held under 1 year, 60% if 1-2 years (for housing).
- Withholding — When a non-resident sells, the buyer is required to withhold the smaller of (a) 11% of the sales price (incl. local tax) or (b) 22% of the gain, and remit to the National Tax Service. The seller files the actual return and reconciles.
4) Rental income tax
- Monthly rent (월세) — Taxable as rental income. Residents file annually via global income tax (종합소득세); rates 6-45%.
- Jeonse interest income (전세 간주임대료) — If you own 3+ homes (and a Jeonse contract is in place), an imputed rental income is calculated and taxed. Owners of 1-2 small-area homes are typically exempt.
- Non-resident landlords — Subject to withholding at source (typically 22% of gross rent, including local tax surcharge), with the tenant or property manager remitting. Tax treaty between Korea and the owner's country may reduce the rate.
5) Tax registration & filing
- Foreigners need a tax ID number — alien registration number (ARN) for residents, or a registration with the National Tax Service for non-residents.
- Annual income tax filing is May 1 - May 31 for the prior year. Capital gains tax has a preliminary return within 2 months of sale and a final reconciliation in May.
- Acquisition tax is paid within 60 days of acquiring the property. The local municipality (구청) handles this; most law firms or judicial scriveners (법무사) submit it on your behalf as part of closing.
- NTS Hometax (English): www.hometax.go.kr