One renovation receipt can cut capital gains tax by ₩11.286M — only if you can show it
When you sell a home at a taxable gain, renovation costs that raised its value or extended its life are deducted from the gain. Extending a balcony or installing heating or cooling that was not there counts; replacing wallpaper or a sink does not. For one of two homes bought at ₩400M and sold at ₩600M after 5 years, failing to show ₩30M of renovation costs means ₩52.261M of tax, while showing them means ₩40.975M, ₩11.286M less. You need receipts or bank-transfer records.
Conditions used in the calculation
- Deductible work
- spending that raised the home's value or extended its life (capital expenditure)
- Counts
- conversion to a different use · installing heating or cooling · improvements such as balcony extension
- Does not count
- replacing wallpaper or a sink to keep using it as before
- Proof
- receipts or financial records such as bank transfers
- Example
- bought ₩400M, sold ₩600M after 5 years · one of two homes · non-regulated, no surcharge · ₩30M of work
- Basis
- 소득세법 제97조 · 시행령 제163조 · 제67조
Results
- No proof of renovation
- ₩52.261M
- ₩30M of renovation proven
- ₩40.975M
- Tax saved
- ₩11.286M
- Rate
- 38% bracket on a ₩150.5M tax base (with proof)
At a glance
Sold ₩600M · bought ₩400M · 5 years · one of two homes · non-regulated · including local income tax.
- No proof₩52.261M
- With proof₩40.975M
Why it works this way
A receipt from fixing up your home can cut your tax by more than ₩11M when you sell years later, because renovation costs are deducted from the gain.
소득세법 시행령 제163조 ③ and 제67조 ②.
- Countsbalcony extension · heating or cooling installed · conversion
- Does notreplacing wallpaper or a sink
- Conditionyou can show it with receipts or bank transfers
Only spending that raised the value or extended the life counts.
For one of two homes bought at ₩400M and sold at ₩600M after 5 years, tax is ₩52.261M if you cannot show ₩30M of renovation costs and ₩40.975M if you can. That is ₩11.286M less.
Checked with the capital-gains engine · including local income tax.
- No proof₩52.261M
- ₩30M proven₩40.975M
- Difference₩11.286M
If it is your only home and exempt, there is no tax to reduce. This example sells one of two homes.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
소득세법 시행령 제163조 ③ (capital expenditure)
In force Current (checked 2026-09-27, version effective 2026-07-01)
Capital expenditure for which supporting documents are received and kept, or for which actual payment is confirmed by financial transaction records.
What this means
Work you cannot show is not deducted. A bank-transfer record is enough.
소득세법 시행령 제67조 ② (capital expenditure defined)
In force Current (checked 2026-09-27)
Repair costs that extend an asset's useful life or actually increase its value, including conversion to a different use, installing heating or cooling, and improvement, extension or enlargement.
What this means
Work that makes the home better counts; replacing things to use them as before does not.
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 Capital Gains Tax Calculator
Frequently asked
What if I lost the receipt?
It is accepted if the payment can be confirmed through financial records such as a bank transfer. Cash with no record at all is hard to deduct.
What about replacing window frames?
They are not named in the regulation. It depends on whether the work raised the home's value, so keep a description of the work together with the proof.
Is this useless if I only own one home?
If the one-home exemption leaves no tax, there is nothing to deduct. But a sale above ₩1.2B or a second home later can change that, so keep the records.
Are brokerage fees and acquisition tax deducted too?
Yes. Acquisition tax paid when buying and brokerage fees when buying and selling are also deducted. This example only includes the ₩30M of renovation.
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.