Korean Long-Term Holding Deduction Calculator

When capital gains tax is charged on the profit from selling real estate in Korea, part of the gain is deducted in proportion to how long you held the property. That is the long-term holding deduction. Enter whether you are a single-home household, how many years you owned the property, how many years you lived in it and the size of the gain, and this calculator shows the deduction rate, the deduction amount and the taxable gain that remains. It stops before the tax rate is applied, so the answer is not the tax itself but how much of the gain is left to tax.

The rate comes from one of two tables: one for ordinary assets and one for a single-home household. The two differ sharply at the same holding period, and the single-home table counts ownership and residence separately and adds them together. That is why the calculator asks for years of residence on its own, and why it points out when the residence part is being missed.

Anyone estimating capital gains tax before selling a home or land. If waiting a few months would complete another full year of ownership, you can see how much that changes the rate and time the sale accordingly. For a single-home household the date on which another year of residence is completed matters for the same reason.

It is especially useful for single-home owners who let the property out and live elsewhere. It is natural to expect a large deduction after a long ownership, but the residence part only counts years you actually lived there. The calculator lets you compare how much the deduction grows if you move back in before selling.

The rule is 소득세법 제95조제2항. The deduction starts at 3 years of ownership, counted under 제4항 of the same article from the acquisition date to the transfer date. The ordinary table starts at 6% for 3 years, rises by 2 points a year and stops at 30% from 15 years. Only completed years count, so nine years and eleven months is nine years.

The single-home table counts ownership and residence separately. Ownership adds 4 points a year up to 40% at 10 years, and residence adds 4 points a year up to 40% at 10 years, for a combined maximum of 80%. The residence part applies only once ownership reaches 3 years, and there is a separate cell of 8% for residence of 2 years but less than 3. Residence is time lived in the property while owning it, so it can never exceed the ownership period.

The arithmetic is simply the rate from the table multiplied by the gain. What remains is the capital gains amount, from which the basic deduction is taken before the rate schedule is applied. Transfers subject to the surcharge in 제104조제7항 of the same Act get no deduction at all; this calculator does not make that determination, so owners of several homes should check it separately.

A single-home household owns a home for 10 years, lives in it for all 10, and sells for a gain of ₩500 million. The ownership deduction of 40% and the residence deduction of 40% add up to 80%, so the deduction is ₩400 million and the gain left to tax shrinks to ₩100 million.

Had the same gain come from an ordinary asset rather than a single home, the table changes. The ordinary rate for 10 years of ownership is 20%, the deduction ₩100 million, and the remaining gain ₩400 million. Same gain, same holding period, and a fourfold difference in the amount taxed. The single-home table is that powerful when both ownership and residence are fully counted.

The most common is assuming that long ownership means the maximum deduction. The single-home 80% requires 10 years of both ownership and residence, and residence counts only the years you actually lived there. Next is counting ownership generously. The acquisition and transfer dates are normally the earlier of the balance payment date and the registration date, not the contract date. For an inherited home the count sometimes starts from the deceased's acquisition date, which needs separate checking.

Some people apply the ordinary table when they qualify for the single-home table and fear a larger tax than they owe; others pick the single-home table while owning several homes and understate it. Single-home status is judged by the number of homes the whole household holds on the transfer date. Finally, a single-home household pays no tax at all when the sale price is within the exemption threshold, and this deduction never comes into play; the table applies to the portion above the threshold on a high-value home.