The one-home exemption has five steps — what split ₩2.6M from ₩207M
The one-home exemption is not a list of conditions but a series of steps you pass in order. There are five, and clearing the first two gets you the exemption. The other three sit behind it. Sell the same house for the same ₩670M gain and the tax lands at either ₩2,623,500 or ₩206,943,000.
Conditions used in the video
- Sale price
- ₩1.5bn
- Purchase price
- ₩800M
- Allowable expenses
- ₩30M
- Holding period
- 10 years
- Period lived in
- 10 years
- High-value home threshold
- over ₩1.2bn
Results
- Gain on sale
- ₩670M
- Taxable portion (exemption applied)
- ₩134M
- Tax (exemption applied)
- ₩2,623,500
- Tax (exempt, but Table 1 deduction)
- ₩23,325,500
- Tax (requirement not met)
- ₩206,943,000
- Difference
- ₩204,319,500
At a glance
The taxable share becomes five times larger while the long-term holding deduction drops to a quarter.
- Taxable portion (requirement met)20% of the gain
- Taxable portion (requirement not met)100% of the gain
- Long-term holding deduction (requirement met)80%
- Long-term holding deduction (requirement not met)20%
Why it works this way
It is common knowledge that if you hold one house for a long time and then sell it, you pay no capital gains tax. Broadly that is true. But conditions are attached, and missing one of them turns the result completely around.
Start with the basic requirement. On the date of disposal you must be a household owning one home in Korea, and you must have held that home for at least two years. Most people know this much.
The problem is that one more requirement attaches conditionally. If the home was in a regulated area at the time you acquired it, then on top of the two years of holding you must also have lived in it for two years within that holding period.
It turns on whether the area was regulated at the time of acquisition.
- Ordinary areatwo years held
- Regulated area at the time of acquisitiontwo years held + two years lived in
The residence has to fall inside the holding period. Living there before you bought it, or after you sold it, does not count.
Here is where most people get it wrong: as of when do you test whether the area is regulated? The answer is at the time of acquisition. Not whether it is regulated now.
The original position holds even if things change after you buy.
- Unregulated when bought → designated laterno residence requirement
- Regulated when bought → lifted laterresidence requirement applies
In particular, a home acquired on or after 16 October 2025 in Seoul or in the twelve designated Gyeonggi districts, or on or after 1 July 2026 in Hwaseong Dongtan-gu, Yongin Giheung-gu or Guri, needs two years of residence to qualify. That catches people buying right now.
Now the ₩1.2bn point. Even with the one-home exemption, a sale price above ₩1.2bn makes it a high-value home, and the gain attributable to the excess is taxed. There is a misunderstanding here too: crossing ₩1.2bn does not make the whole gain taxable.
For a sale at ₩1.5bn.
- Gain on sale₩670M
- × (₩1.5bn − ₩1.2bn) ÷ ₩1.5bnone fifth
- Taxable portion₩134M
₩1.5bn less ₩1.2bn leaves ₩300M of excess, and ₩300M out of ₩1.5bn is one fifth. The remaining four fifths, ₩536M, carry no tax at all. The closer the sale price is to ₩1.2bn, the smaller the taxable portion.
On top of that comes the long-term holding special deduction. Where the special table (Table 2) applies, you get 4% a year for the holding period (up to 40%) plus 4% a year for the period lived in (up to 40%), for up to 80% in total. Ten years held and ten years lived in gives 80%.
But Table 2 carries one more trap. To use Table 2 you must have lived in the home for at least two years within the holding period. That is separate from the exemption requirement.
The exemption test and the long-term deduction test are not the same.
- Residence for the exemptiononly if the area was regulated at acquisition
- Residence for Table 2at least two years regardless of area
Even if the area was unregulated at acquisition, so you get the exemption without living there, falling short of two years of residence leaves you on Table 1 (2% a year, up to 30%). The tax on the same ₩134M then runs ₩23,325,500 instead of ₩2,623,500. That is ₩20,702,000 more, close to nine times. The smaller deduction enlarges the tax base, so the bracket climbs from 15% to 35% as well.
So a home bought for ₩800M and sold for ₩1.5bn, held and lived in for ten years, comes to around ₩2.6M of tax. On a gain of ₩670M.
Now look at what happens if the area was regulated at acquisition and you never lived there.
Two things turn over at the same time.
- Taxable portion₩134M → ₩670M
- Long-term holding deduction80% → 20%
- Tax₩2.6M → ₩207M
As the tax base grows, the bracket climbs from 15% to 42% as well. It compounds three times over.
The difference is ₩204.32M. Same house, same gain, and one residence requirement between them. That is why the title of this episode is not an exaggeration.
That said, this calculation covers only the headline requirements. There are exceptions. Expropriation, emigration and similar cases lift the holding and residence limits, and a resident converted from non-resident status faces a three-year holding period. Inheritance, marriage and moving in to care for elderly parents, where the number of homes rises, each carry their own relief.
And in practice the more frequently disputed point is whether you are one household at all. Whether a household can be treated as separated, and what counts towards the number of homes, are the real battlegrounds. This calculator assumes one home for one household, so start by confirming that premise.
In the end there are two things to do now. Check the acquisition date on the property register, and check whether that area was a regulated area on that date. Once those two are settled, whether you need to live there is settled with them.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
2026년 세제개편안의 장기보유특별공제 개편 (2026 tax reform bill, long-term holding deduction, not yet passed)
In force Submitted to the National Assembly on 3 Sep 2026 (referred to committee 4 Sep) · targets a split in 2028 and a shift to a residence basis in 2029
The one-home long-term holding special deduction (renamed the long-term residence income deduction after the reform) would move from the current 4% a year for holding plus 4% a year for residence (up to 80% combined) to 6% a year for residence (up to 60%) plus 2% a year for holding (up to 20%) in 2028, and from 2029 to residence alone at 8% a year (up to 80%), with a new deduction ceiling (소득세법 §95(2)(3)(6)). It would apply to disposals on or after 2028-01-01, and the ₩1.2bn exemption threshold stays. (Checked against the Ministry of Economy and Finance detailed release of 2026-08-08.)
What this means
A home held for a long time but never lived in loses much of the deduction from 2029. The worked example on this page (ten years held, ten years lived in) already meets the residence period, so the result would be the same after the reform.
소득세법 시행령 제154조제1항 (scope of the one-home exemption)
In force In force 2026-07-01 (Presidential Decree No. 36343, partial amendment of 2026-05-22)
It means a household owning one home in Korea as at the date of disposal, where that home has been held for at least two years. However, for a home located, at the time of acquisition, in a regulated area under 주택법 제63조의2제1항제1호, the holding period must be at least two years and the period lived in within that holding period must be at least two years.
What this means
The residence requirement does not attach to every home, only to a home that was in a regulated area 'at the time of acquisition'. It is judged on the position when you bought, not on the designation today.
소득세법 제89조제1항제3호 · 시행령 제160조 (high-value homes)
In force In force
For a high-value home with an actual transaction price above ₩1.2bn, the one-home exemption is disapplied to the extent of the gain attributable to the excess. The taxable gain is computed by multiplying the whole gain by (sale price − ₩1.2bn) ÷ sale price.
What this means
Crossing ₩1.2bn does not make the whole amount taxable. Only the excess ratio is taxed. Sell at ₩1.5bn and one fifth becomes the taxable portion.
소득세법 제95조제2항 표1·표2 · 시행령 제159조의4 (long-term holding special deduction)
In force In force
Table 2 deducts up to 80%, combining 4% a year for the holding period (up to 40%) with 4% a year for the period lived in (up to 40%). A one-home household taking Table 2 means, under 시행령 제159조의4, one that has lived in the home for at least two years within the holding period. Everything else falls under Table 1 at 2% a year, up to 30%, and applies only from three years of holding.
What this means
🔴 The Table 2 test is separate from the exemption test. Even where the area was unregulated at acquisition and the exemption comes without residence, falling short of two years of residence caps the deduction at Table 1 (up to 30%). The residence period works independently in two places: the exemption and the deduction.
소득세법 시행령 제154조제1항 단서 · 제8항제2호 (exceptions)
In force In force
Cases falling under items 1 to 3 of the proviso (expropriation, emigration and the like) are not bound by the holding or residence periods, and a case under item 5 is relieved of the residence period only. A resident falling under paragraph 8 item 2 (including one converted from non-resident status) has a three-year holding period.
What this means
Disposals outside your own control, and particular changes of status, run on their own tests. If you fall within one, the exemption is available even where the periods are unmet.
Run it on your own numbers
The calculator opens with these conditions already filled in. Change the figures and your own case comes straight out.
Open the Single-Home Exemption Checker
Frequently asked
Does the residence requirement attach to every home?
No. It attaches only to a home that was in a regulated area at the time of acquisition. A home in an ordinary area needs only the two years of holding.
What if the area was designated as regulated after I bought?
No residence requirement attaches, because the test is applied at the time of acquisition. Conversely, if it was a regulated area when you bought, you must still complete two years of residence even after the designation is lifted.
Is everything taxable once I cross ₩1.2bn?
No. Only the gain attributable to the excess is taxed. It is computed by multiplying the whole gain by (sale price − ₩1.2bn) ÷ sale price, so on a ₩1.5bn sale only one fifth of the gain is taxable.
Which period of residence counts?
It has to be residence within the holding period. Living there before acquisition or after disposal does not count. And the residence period is used in two places: if the area was regulated at acquisition, two years is needed for the exemption, and quite separately, two years of residence is needed for Table 2 of the long-term holding deduction (up to 80%) regardless of area.
I have not met the requirement. Can I still move in now?
You qualify if you complete two years of residence within the holding period. If you have not yet sold, there may still be time, so adjusting the timing of the disposal is an option. It turns on your own circumstances, so consult a tax professional.
Can I rely on this calculator alone?
No. It judges only the headline requirements and assumes one home for one household. Whether a household is treated as separated, and how the number of homes is counted, are frequently the real issues, and the reliefs for expropriation, emigration, inheritance and marriage are not reflected. Have a professional confirm your position before you file.
Results are estimates based on the inputs and on the rules as at the stated date. They may differ from a lender's actual assessment, and the rules change often. Take professional advice before any decision that matters.