Korean Inheritance and Gift Property Valuation Calculator

Before you can file inheritance or gift tax on a property in Korea, you have to settle what the property is worth. That figure is the assessed value, and every won of tax flows from it. The difficulty is that real estate has no price tag. The last sale price, the official published price and an appraisal can all differ, and which one you use can move the tax by hundreds of millions of won. This calculator follows the order set out in 상속세 및 증여세법 (the Inheritance and Gift Tax Act): market price first, then the official price, then the rent-converted figure, and settles on the one value you should file.

It also gives you the valuation window. Enter the valuation date and it shows, as calendar dates, the period within which a sale or appraisal counts as market price. Inheritance and gift use windows of different lengths, so the same transaction can be a market price for one and not for the other.

Anyone who has inherited, or is about to receive as a gift, a house, flat, shop or officetel and needs to fill in the return. It matters most for people receiving a let commercial property. Filing on the official price alone and then finding that the rent-converted figure is higher, and therefore governs, is a common and expensive mistake.

It is also worth running before a planned gift. Because you choose the timing of a gift, you can manage the window, for example by not gifting immediately after an unusually high sale in the same building. And anyone planning to commission an appraisal to establish a market price can check here whether one firm is enough or two are required.

상속세 및 증여세법 제60조제1항 says property is valued at its market price as at the valuation date. That is the rule. If, within the window, the property or a comparable property was sold, appraised, expropriated, auctioned or sold publicly, that figure is the market price and nothing else is considered. The window comes from 시행령 제49조제1항: for inheritance it runs from 6 months before to 6 months after the valuation date, and for a gift from 6 months before to 3 months after. A transaction outside the window but within 2 years before the valuation date can still be brought in as market price through the valuation review committee.

Only when a market price is hard to establish does 제60조제3항 send you to the supplementary method. Land uses the individual published land price, housing the individual or collective house price, officetels and commercial buildings the combined value published by the National Tax Service, and other buildings the NTS standard building value. 제61조제5항 then adds one more step: if the property is let, the value is the greater of that official figure and the rent-converted figure from 시행령 제50조제7항. The conversion divides one year's rent by 12% and adds the deposit. Dividing by 12% is the same as multiplying the monthly rent by 100.

When you establish a market price by appraisal, 제60조제5항 requires two or more appraisal firms as a rule, but 시행령 제49조제6항 allows a single firm where the standard value is ₩1 billion or less. The calculator uses the official figure you enter to make that call.

Suppose you inherit a shop and there was no sale or appraisal within the window. The NTS published value is ₩500 million, and the shop is let on a ₩100 million deposit with ₩5 million a month in rent. Annual rent is ₩60 million; divided by 12% that is ₩500 million, and adding the ₩100 million deposit gives a rent-converted figure of ₩600 million. That is ₩100 million above the published value, so the assessed value is ₩600 million. Filing at ₩500 million on the strength of the published value would leave ₩100 million out.

With a market price the picture changes. If an identical unit on the same floor sold for ₩700 million within the window, that ₩700 million is the market price and neither the published value nor the rent-converted figure is looked at. The market price governs even when it is lower than the published value. And because this shop's standard value is at or below ₩1 billion, a single appraisal firm would suffice if you wanted an appraisal.

The most common is treating the official price as the assessed value. The official price is a fallback for when there is no market price, and for property that trades often, such as flats in a large complex, there is almost always a comparable sale, so the market price applies. File on the official price without checking for a sale of the same size in the same complex and the tax office will reassess at market price and add penalty tax.

The second is leaving the rent-converted figure out for a let shop or officetel. The smaller the deposit and the larger the monthly rent, the more easily the converted figure overtakes the official price. The third is assuming a gift has the same window as an inheritance. The back half of the gift window is only 3 months, so a sale more than 3 months after the gift is, as a rule, not a market price. Finally, remember that this calculator settles the value of one property only. The tax itself comes from the deductions and rates in the inheritance and gift tax calculators.