Capital gains tax in South Korea Confirm the cited source.

South Korea's capital gains levy (yang-do-so-deuk-se, 양도소득세) is administered by the National Tax Service (NTS, 국세청) under the Income Tax Act (So-deuk-se-beob, 소득세법). The tax distinguishes sharply between asset classes: residential real estate carries steep progressive rates with holding-period penalties designed to cool speculation, while listed-share gains are largely exempt for the country's 14-plus million retail investors.

01How does Korea tax real estate capital gains?

Gains on residential real estate held for two or more years are taxed using the same eight progressive brackets as ordinary income -- 6% up to KRW 14 million of gain, scaling through 15%, 24%, 35%, 38%, 40%, 42%, and 45% above KRW 1 billion -- plus a mandatory 10% local income tax surtax on the national amount (effective top rate 49.5%). Short holding periods trigger flat penalty rates: property sold within one year of acquisition is taxed at 70% (77% including local tax) for residential houses; property sold in the one-to-two-year window faces 60% (66% with local tax). These elevated short-term rates were enacted through the 2020 Tax Law Amendments and became effective for transactions on or after June 1, 2021. A basic annual deduction of KRW 2.5 million offsets the taxable gain before the rate table applies. Source: NTS rate schedule (nts.go.kr, Article 104 So-deuk-se-beob). South Korea country overview

Note: surcharges on multi-home owners were under moratorium from May 2022 to May 11, 2026 and expired at that date.

02What is the one-household one-home exemption?

A household owning exactly one residential house in Korea and meeting minimum ownership and residency conditions is generally exempt from capital gains tax on the sale of that home. As of 2025, the exemption applies in full where the sale price does not exceed KRW 1.2 billion (raised from KRW 900 million under the 2025 tax revision). For higher-value homes above the KRW 1.2 billion ceiling, only the gain attributable to the portion above the threshold is taxable. Minimum conditions are: at least two years of ownership, and, for homes in a designated adjustment-target zone (jojeong daeseang jiyeok), at least two years of actual residence. Single-home owners who held and resided in the property for ten or more years may also claim the long-term holding special deduction (janggi boyu teukbyeol gongje, 장기보유특별공제) at a combined rate of 4% per year for the holding period plus 4% per year for the residence period, capped at 80% of the gain -- reducing the effective taxable base to as little as 20% of the gross gain. Source: NTS, Asiae English edition (December 2024 economic policy announcement).

03What surcharges apply to multi-home owners?

Owners of two or more residential properties face additional capital gains tax surcharges of 20 to 30 percentage points on top of the base progressive rates when they sell, bringing the effective national rate as high as 75% before local tax. The surcharge structure -- introduced under the Moon Jae-in administration's 2020 housing-market intervention -- was placed under a rolling moratorium by the Yoon Suk-yeol administration beginning May 2022 to stimulate transactions. That moratorium was extended annually and most recently prolonged to May 9, 2026 as part of the government's 2025 Economic Policy Direction announced in December 2024 (source: Asiae English, Korea Times). The moratorium expired on schedule on May 11, 2026 without further extension; multi-home owners selling from that date face the full surcharge, potentially reaching an effective rate of 82.5% (national plus local) on gains from properties in overheated-designation zones. Owners who completed contracts before the May 11, 2026 deadline remain protected under the moratorium rules. Given the complexity and policy volatility of the multi-home surcharge framework, individuals in this category are encouraged to verify current rules with a qualified tax professional.

04Are listed-share gains exempt for retail investors?

Gains from selling shares listed on the Korea Exchange (KRX) are exempt from capital gains tax for investors who fall below the large-shareholder threshold. A shareholder is classified as a large shareholder (dae-ju-ju, 대주주) under Article 94 of the Income Tax Act if they hold 1% or more of a company's total issued shares (direct plus related-party holdings), OR if the aggregate market value of their holdings in one company reaches KRW 5 billion or more at the preceding December 31 year-end measurement date. Large shareholders pay 22% (including 2% local income tax) on gains from shares held one year or more, and 25% (including local tax) on shares held less than one year. Gains on unlisted company shares are taxable regardless of holding size: 22% for small-to-medium enterprises (SMEs) and 25% for large company shares; SME-qualifying holdings under the Special Tax Treatment Limitation Act may access a reduced 11% rate. The KRW 5 billion threshold was restored to its current level by the Yoon administration in December 2023 after a prior proposal to lower it to KRW 1 billion was withdrawn under retail-investor pressure; a September 2025 proposal to cut it to KRW 1 billion was similarly scrapped (source: KED Global, September 2025). Source: PwC Korea Worldwide Tax Summaries 2026, NTS Article 94.

05What happened to the Financial Investment Income Tax (FIIT)?

The Financial Investment Income Tax (Geum-yung-tu-ja-so-deuk-se, 금융투자소득세 -- FIIT) was a proposed unified levy that would have taxed annual gains from listed shares, bonds, funds, ETFs, and derivatives exceeding KRW 50 million at 22% (25% for gains above KRW 300 million). Originally announced in 2020 for a 2023 start, it was deferred twice. In December 2024 the National Assembly formally abolished the FIIT through the 2025 Tax Law revision before the January 2025 implementation date, motivated by concern that the new tax would drive domestic retail capital toward overseas markets and deepen the so-called Korea Discount on KRX valuations. The existing listed-share retail-investor exemption therefore remains in force as of 2026. Note: the FIIT abolition did not affect cryptocurrency -- a separate 22% levy on virtual-asset income gains above KRW 2.5 million is now scheduled to take effect for transactions beginning January 1, 2027, with first filings in 2028. Source: Korea National Assembly tax reform bill December 2024; Lexology 2025 Korean Tax Amendments summary.

06When and how is capital gains tax filed?

Real estate disposals require a preliminary return filed within two months of the end of the month in which the transfer occurred -- for example, a property sold in March means a return due by May 31. Sellers who fail to file a preliminary return must complete an annual final return during the NTS general filing window of May 1 to May 31 (or June 1 in leap-year adjusted years) for the preceding calendar year. For securities, large shareholders who sold listed shares during January to June file a preliminary return by August 31; those selling July to December file by March 31 of the following year. The NTS enforces capital gains compliance actively: in May 2026 the NTS issued filing notices to approximately 220,000 taxpayers for 2025 gains, including roughly 10,000 for real estate disposals. Failure to file carries a 20% underpayment penalty plus 0.022% per day interest on unpaid tax. Source: NTS English guide (nts.go.kr/english), Seoul Economic Daily May 2026.

Capital gains tax in Korea is a fact-specific area shaped by property classification, holding duration, household configuration, and current zoning designations. Verify your specific situation with a qualified tax professional before relying on general rate information.