Miss one condition on the one-home exemption and ₩0 becomes ₩200M
A one-home household is exempt on a sale price up to ₩1.2B, with only the excess taxed. But a home that sat in an adjustment target area at the time of acquisition needs two years of residence on top of two years of holding. Miss that and the entire gain is taxed. A reform announced on 3 August 2026 keeps the ₩1.2bn exemption but would rebuild the long-term holding deduction around residence from 2028.
Conditions used in the video
- Sale price
- ₩1.5B
- Acquisition price
- ₩800M
- Necessary expenses
- ₩30M
- Holding period
- 10 years
- Residence period
- 10 years
- High-value home threshold
- above ₩1.2B
Results
- Gain on sale
- ₩670M
- Taxable portion (exemption applied)
- ₩134M
- Tax (exemption applied)
- ₩2,623,500
- Tax (conditions not met)
- ₩206,943,000
- Difference
- ₩204,319,500
At a glance
The taxable share multiplies fivefold at the same moment the long-term holding deduction falls to a quarter of what it was.
- Taxable share (conditions met)20% of the gain
- Taxable share (conditions not met)100% of the gain
- Long-term deduction (conditions met)80%
- Long-term deduction (conditions not met)20%
Why it works this way
That you pay no capital gains tax on a single home held for a long time is widely known, and broadly it is true. But conditions are attached, and missing one of them turns the result completely around.
The basic conditions first. As at the date of sale you must be a household holding one home in Korea, and you must have held that home for at least two years. Most people know this much.
The difficulty is that one further condition attaches conditionally. If the home sat in an adjustment target area at the time of acquisition, then on top of the two years of holding you must have lived there for two years within that holding period.
It turns on whether the area was an adjustment target area at the time of acquisition.
- Ordinary area2 years holding
- Adjustment target area at acquisition2 years holding + 2 years residence
The residence must fall within the holding period. Living there before you bought, or after you sold, does not count.
Here is where the misunderstanding most often sits: as at what moment do you ask whether it was an adjustment target area? The answer is the time of acquisition. Not whether it is one now.
The position fixed at the start holds even if things change afterwards.
- Unregulated when bought → designated laterno residence condition
- Regulated when bought → lifted laterresidence condition applies
In particular, a home acquired on or after 16 October 2025 in Seoul or in the 12 designated areas of Gyeonggi, or on or after 1 July 2026 in Hwaseong Dongtan-gu, Yongin Giheung-gu or Guri, needs two years of residence to be exempt. It bites immediately on anyone buying now.
Now the ₩1.2B. Even with the one-home exemption, a sale price above ₩1.2B makes it a high-value home and the gain attributable to the excess is taxed. There is a misunderstanding here too: going above ₩1.2B does not put the whole gain into tax.
Taking a sale at ₩1.5B.
- Gain on sale₩670M
- × (₩1.5B − ₩1.2B) ÷ ₩1.5Bone fifth
- Taxable portion₩134M
The whole gain is multiplied by the excess ratio. The closer the sale price sits to ₩1.2B, the smaller the taxable portion.
The long-term holding deduction comes on top. Where the special table (table 2) applies, 4% a year for the holding period (up to 40%) and 4% a year for the residence period (up to 40%) combine for as much as 80%. Ten years held and ten years lived in gives 80%.
But table 2 carries a trap of its own. To be given table 2 you must have lived there for at least two years within the holding period. That is separate from the exemption conditions.
The condition for exemption and the condition for the long-term deduction are not the same.
- Residence for exemptiononly where regulated at acquisition
- Residence for table 22 years, wherever the home is
Even if the area was unregulated at acquisition and you get the exemption without living there, falling short of two years' residence puts you on table 1 (2% a year, up to 30%). The tax on the same excess above ₩1.2B changes considerably.
So a home bought at ₩800M and sold at ₩1.5B, held and lived in for ten years, comes down to tax of around ₩2.62M. On a gain of ₩670M.
Now take the case where it was in an adjustment target area at acquisition and you did not live there.
Two things turn over at once.
- Taxable portion₩134M → ₩670M
- Long-term holding deduction80% → 20%
- Tax₩2.62M → ₩206.94M
As the tax base grows, the rate band climbs too, from 15% to 42%. It compounds in three layers.
The difference is ₩204.32M. The same home, the same gain, on one residence condition. That is why the title of this episode is not an exaggeration.
This calculation looks only at the principal conditions, though. There are exceptions. Expropriation, emigration and the like lift the holding and residence requirements altogether, and a resident converted from non-resident status has a three-year holding period. Where the number of homes rises through inheritance, marriage or taking in a parent, separate special rules apply.
And what is more often disputed in practice is the household determination itself. Whether a household can be treated as separated, and what counts towards the number of homes, are the live issues. This calculator assumes a one-home household, so that assumption is the first thing to check.
In the end there are two things to do now. Check the acquisition date on the property register, and check whether the area was an adjustment target area as at that date. Settle those two and whether you must complete the residence is settled with them.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
2026 tax reform: long-term holding deduction rebuilt (not yet passed)
In force Submitted to the National Assembly on 3 Sep 2026 (referred to committee 4 Sep) · split table from 2028, residence-only from 2029
The single-home long-term holding deduction — currently 4% per holding year plus 4% per residence year, capped at 80% — becomes 6% per residence year plus 2% per holding year in 2028, then 8% per residence year only from 2029, with a new cap (Income Tax Act §95(2)(3)(6)). Applies to disposals from 1 January 2028; the ₩1.2bn exemption itself stays. (Verified against the ministry's full text on 8 Aug 2026.)
What this means
A home held long but never lived in loses most of its deduction from 2029. The worked example on this page (10 years held, 10 years lived) is unaffected because the residence years are already there.
소득세법 시행령 제154조제1항 (scope of the one-home household)
In force in force 2026-07-01 (Presidential Decree 36343, partial amendment of 2026-05-22)
It means a household holding one home in Korea as at the date of sale, where that home has been held for at least two years. Where the home was, at the time of acquisition, in an adjustment target area under 「주택법」 제63조의2제1항제1호, however, the holding period must be at least two years and the residence period within that holding period must also be at least two years.
What this means
The residence condition does not attach to every home, only to one that was in an adjustment target 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 ₩1.2B, the one-home exemption is disapplied only as to the gain attributable to the excess. The taxable gain is the whole gain multiplied by (sale price − ₩1.2B) ÷ sale price.
What this means
Going above ₩1.2B does not tax the whole thing. Only the excess ratio is taxed. Sell at ₩1.5B and one fifth is taxable.
소득세법 제95조제2항 표1·표2 · 시행령 제159조의4 (long-term holding deduction)
In force in force
Table 2 combines 4% a year for the holding period (up to 40%) with 4% a year for the residence period (up to 40%), to a maximum of 80%. A one-home household given table 2 means, under 시행령 제159조의4, one whose residence period within the holding period is at least two years. Otherwise table 1 applies at 2% a year, up to 30%, and requires at least three years of holding.
What this means
**The table 2 condition is separate from the exemption condition.** Even where the area was unregulated at acquisition and the exemption comes without residence, falling short of two years' residence leaves you on table 1 (up to 30%). The residence period works in two places, independently.
소득세법 시행령 제154조제1항 단서 · 제8항제2호 (exceptions)
In force in force
Where 제1호 to 제3호 of the proviso apply (expropriation, emigration and the like), the holding and residence period requirements do not apply; where 제5호 applies, only the residence requirement is lifted. A resident falling within 제8항제2호 (such as 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, have their own standards. If one applies, the exemption is possible even where the periods are not complete.
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 condition attach to every home?
No. Only to a home that was in an adjustment target 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 after I bought?
No residence condition attaches, because the test is the position at the time of acquisition. Conversely, if it was an adjustment target area when you bought, you must complete two years of residence even if the designation is later lifted.
Above ₩1.2B, is the whole thing taxed?
No. Only the gain attributable to the excess. The whole gain is multiplied by (sale price − ₩1.2B) ÷ sale price, so on a sale at ₩1.5B only one fifth of the gain is taxable.
Which residence period counts?
It must be residence within the holding period. Living there before acquisition or after the sale does not count. And the residence period is used in two places. If the area was an adjustment target area at acquisition, two years is needed as an exemption condition; separately from that, table 2 of the long-term holding deduction (up to 80%) needs two years of residence wherever the home is.
I have not met the condition. Can I move in now?
Completing two years of residence within the holding period is what is required. If you have not yet sold, there may still be time, and adjusting the timing of the sale is one option. It turns on the particular circumstances, so take advice from a tax professional.
Can I rely on this calculator alone?
No. It determines only the principal conditions and assumes a one-home household. Whether a household is separated, and how the number of homes is counted, are frequently the live issues, and the special rules for expropriation, emigration, inheritance and marriage are not reflected. Have it checked by a professional 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.