Korean Commercial Property Acquisition Tax Calculator

When you buy non-residential property in Korea, whether a shop, an office, a factory or a warehouse, a set of taxes falls due before the title can be registered, and the agent's commission and registration costs go out on the same day. This calculator adds all of it up. Acquisition tax looks like one tax, but the bill actually carries three lines: the acquisition tax itself, a local education tax and a rural special tax. Each line is shown separately, and the final row tells you how much cash you actually need beyond the purchase price.

The "share of the price" figure is built to be pasted straight into this site's warehouse investment yield calculator. If you divide rent by the purchase price alone, the yield looks better than it is; only when every won spent on acquisition sits in the denominator do you get the real return.

Use it before paying a deposit, at the stage where you are working out where the money comes from. Loans are sized against the appraised or contract price, and tax and fees are never part of the loan. Everything this calculator adds on top has to come from your own funds, and it is common for buyers to discover the gap on closing day and scramble for a personal loan to cover it.

Home buyers can press the "Home" button for a rough figure too. The home mode applies only the standard single-home rate, so anyone who already owns a home or is buying through a company, where the rate climbs, should use the home acquisition tax calculator instead.

Acquisition tax is a local tax set out in 지방세법 제11조. For non-residential property bought for money the rate is a flat 4%, and it does not rise with the price. Two surtaxes ride on top of it. The local education tax under 지방세법 제151조 is 20% of the acquisition rate after 2% is taken off, which works out to 0.4%. The rural special tax under 농어촌특별세법 제5조 is 10% of the tax computed at a notional 2% rate, which is 0.2%. Added together they give the 4.6% that people mean when they talk about "commercial acquisition tax".

The arithmetic is simply the price multiplied by each of the three rates. For the commission, 공인중개사법 시행규칙 lets agent and client agree any figure up to 0.9% of the transaction value on non-residential property, so the calculator starts at that ceiling; if you negotiated lower, type in your rate. The registration agent fee is not fixed by law and is whatever you agree with the 법무사, so enter the quote you were given.

Homes work on a different scale. 지방세법 제11조제1항제8호 sets 1% for homes priced at ₩600 million or less, 3% above ₩900 million and a formula with decimals in between, and the local education tax is one tenth of the acquisition rate. Homes of 85㎡ or less are exempt from the rural special tax, so a home at ₩600 million or below comes to 1.1% in total.

Take the default on screen, a commercial property at ₩17 billion. Acquisition tax at 4% is ₩680 million, local education tax at 0.4% is ₩68 million and rural special tax at 0.2% is ₩34 million, so tax alone is ₩782 million. Commission at the 0.9% ceiling is ₩153 million, and with ₩3 million for registration you need ₩938 million on top of the price. That is 5.52% of the purchase price, and the total cash required is ₩17.938 billion.

Switch the same calculator to a home of 85㎡ or less at ₩500 million and you get acquisition tax at 1%, ₩5 million, plus local education tax at 0.1%, ₩500,000, for ₩5.5 million. Commission at the default 0.4% adds ₩2 million and registration ₩3 million, giving ₩10.5 million, or 2.1% of the price. The price differs by a factor of 34, yet the tax burden as a share of price is more than twice as high on the commercial property.

The most common error is remembering acquisition tax as 4% and forgetting the two surtaxes. The real bill is 4.6%, which on ₩17 billion is a gap of more than ₩100 million. The next is treating the commission like a tax with a fixed rate. 0.9% is a ceiling, not a tariff, and the bigger the deal the more room there is to negotiate.

Deadlines get missed too. Acquisition tax must be reported and paid within 60 days of paying the balance, and the registry will not transfer title without the payment receipt. Miss the deadline and penalty tax follows. Finally, a company incorporated less than five years ago in the Seoul metropolitan overconcentration control zone that buys property inside it, or anyone buying luxury assets such as a villa or a high-end entertainment venue, pays a heavier rate than the standard one. If that describes you, raise the acquisition tax rate field yourself and have a tax adviser confirm the exact rate.