Buying Property in Korea: What Foreign Owners Actually Pay
One question comes up more than any other from clients based outside Korea: what will I actually pay, and when? Korean real estate tax is not decided by nationality.
It depends on residency status, whether the property is held individually or through a company, the type and location of the property, the number of properties already owned, holding period, and how funds move in and out of the country. Nine questions below, following one transaction from the day it is signed to the day the property is eventually passed on.
Q1. Is there a single "foreign buyer's tax rate"?
No. The most common misconception is that a foreign passport determines the tax outcome. In practice, what matters is: whether you are a resident or non-resident under Korean tax law; whether title is held by an individual or a company; whether the property is a house, an officetel, or commercial space; how many properties you already hold in Korea; whether you will live in it or rent it out; the price, size, and location of the property; whether the purchase funds came from abroad; and whether sale proceeds will eventually leave Korea. Acquisition tax alone is not the full picture — acquisition, holding, leasing, disposal, and fund repatriation need to be considered as one connected structure.
Q2. What do I pay when I acquire the property?
Three separate matters apply, and they are easy to conflate: acquisition tax, transaction/acquisition reporting, and foreign exchange reporting.
Acquisition tax. For an individual acquiring a house by purchase, the general rate (national tax portion) is:
| Purchase price | General rate |
|---|---|
| KRW 600M or below | 1% |
| KRW 600M–900M | 1–3% |
| Above KRW 900M | 3% |
Local education tax and other surtaxes are added on top, so the amount actually paid will not simply equal price × this rate. Foreign buyers are subject to the same multi-house and regulated-region surcharge rules as Korean citizens — owning a house in a designated "adjustment target area" does not automatically trigger the higher surcharge; existing house count, region, acquisition entity, and temporary two-house exceptions are all considered together. Corporate acquirers of housing generally face a 12% surcharge rate, with limited exceptions.
Large, high-value residences also warrant a separate check under the Local Tax Act's "luxury housing" classification, which can carry a materially higher rate than the general schedule above. This is judged by floor area, facilities, and actual use, not by the name on the building register — and an officetel used in practice as a residence can affect house-count and tax classification even though it is registered as commercial space. This is worth confirming before signing for any high-end property.
Reporting. A standard real estate transaction report is due within 30 days of contract, ordinarily filed by the licensed broker in a brokered transaction. Separately, foreign nationals acquiring real estate must file a foreign acquisition report — generally within 60 days of contract for a purchase, within 6 months of acquisition for inheritance or auction, and within 6 months of becoming a foreign national if a property was already held. Where a standard transaction report has been properly filed, a duplicate foreign acquisition filing is sometimes not required — so it is not accurate to say a foreigner must always file a separate 60-day report after every purchase.
Certain zones — military facility protection areas, cultural heritage protection zones, ecological conservation areas — require permission before a foreigner may acquire land there. Separately, and applicable to anyone regardless of nationality, ordinary land transaction permission zones may apply.
As of July 2026, Seoul is entirely within a land transaction permission zone specifically targeting foreign buyers, alongside parts of the greater capital region. Acquiring a house in this zone requires prior permission and, once granted, an actual residency commitment of roughly two years beginning within four months of approval. Because designations are time-limited and subject to renewal, confirm the current status immediately before contracting.
Foreign exchange reporting. A non-resident bringing funds from abroad to purchase Korean property may need to file with a designated foreign exchange bank or the Bank of Korea, depending on the transaction structure — not every remittance is reported the same way. Relevant factors include whether the remitter is a resident or non-resident, an individual or foreign company, whether the funds are the buyer's own or borrowed, and whether the funds pass through a domestic account. Keep the remittance confirmation, exchange records, purchase agreement, acquisition report, and tax payment records — these will matter later when proving the source of funds for an eventual sale.
Q3. What do I pay simply for owning it?
Holding tax in Korea is assessed on ownership and published value as of June 1 each year — nationality plays no role.
Property tax applies annually to whoever owns the property on that date, generally at a progressive rate of roughly 0.1–0.4% depending on the tax base, published value, and applicable ratios.
Comprehensive Real Estate Tax may apply once the combined published value of housing held in Korea passes a threshold. Typical deductions are:
| Ownership type | Typical deduction |
|---|---|
| Individual | KRW 900M |
| Single-house household | KRW 1.2B |
| Corporation | Generally no deduction |
Owning one house does not automatically qualify a foreign owner for the KRW 1.2B deduction, nor does it automatically disqualify them — this depends on the household definition under tax law, any Korean housing held by a spouse or household members, whether title is sole or joint, and Korean tax-residency status. The joint-ownership special deduction in particular carries a residency condition, which is worth checking individually for a non-resident owner.
Q4. What if I lease the property out?
Rental income from Korean real estate is Korean-source income regardless of the owner's nationality or residence.
Residential leasing. House count is generally combined across a married couple. A single high-value house (above roughly KRW 1.2B in published value) can have taxable monthly rent even as the only property; a second house has taxable rental income; a third or more can additionally trigger deemed rental income on deposits under certain conditions. Where annual rental income is KRW 20M or below, the owner can generally choose between a flat 14% separate rate and standard progressive filing; above that threshold, rental income is combined with other income and taxed progressively, generally 6–45%.
Commercial leasing — retail or office space — typically requires business registration, 10% VAT filing on rent, income or corporate tax filing, and a VAT review of deemed rental income on any deposit. An officetel should be checked for its actual use, since residential and commercial leasing are treated very differently for VAT purposes.
Non-resident owners. A common misconception is that a tenant simply withholds 20% from the rent and the owner's Korean tax obligation ends there. In practice, rental income from Korean real estate is generally treated as income requiring bookkeeping and an annual comprehensive income tax filing in Korea, not a flat withholding. Non-resident owners should generally expect to: consider appointing a Korean tax manager, register as a business in Korea, track rental income and deductible expenses, confirm VAT filing obligations, and file comprehensive income tax each May.
Q5. What happens when I sell?
A gain on sale of Korean real estate is subject to Korean capital gains tax, generally at a progressive rate of 6–45% of the taxable base — though the actual amount depends heavily on acquisition and sale price, transaction costs, holding period, house count, whether the property sits in a regulated region, actual residency period, the long-term holding deduction, and whether the transfer was registered. Short-term holding or multi-house ownership in a regulated area can push the applicable rate above the base schedule; regulatory carve-outs and grace periods for multi-house surcharges have shifted over time, so the rules in effect on the contract date should be confirmed directly rather than assumed from past cycles.
Resident single-house exemption. A Korean tax resident meeting the single-house, single-household test can qualify for a capital gains exemption. For a high-value home, this is not an all-or-nothing exemption — where the sale price exceeds KRW 1.2B, the gain is taxed proportionally only on the portion attributable to value above that threshold. Houses acquired in a regulated area may also need to satisfy an actual residency period, not just a holding period, depending on when they were acquired.
Non-resident sellers generally cannot claim the resident single-house exemption or the full long-term holding deduction available to residents. A limited exception can apply where someone who was a Korean resident became a non-resident for reasons such as emigration, a child's overseas schooling, or an overseas work posting, and disposes of a single house held before departure within a defined window — this is a narrow carve-out, not a general non-resident benefit.
Filing deadline. A preliminary capital gains return is generally due within two months of the end of the month in which the transfer occurred — for example, a sale that settles and transfers title on July 15 would generally require filing and payment by September 30.
Withholding on sale. When a non-resident seller sells to an individual buyer for personal use, the buyer generally has no withholding obligation. Where the buyer is a company or another party required to withhold, the withholding is generally the lesser of 10% of the sale price or 20% of the gain — and the method can change where the seller has already obtained tax office confirmation of the tax due or of an exemption.
Repatriating proceeds. A bank may request the original inbound remittance records, the sale agreement, the property registration certificate, acquisition tax payment records, capital gains filing and payment records, and documentation of the source of the sale proceeds. Tax office review and the receiving bank's foreign exchange review are separate processes — keeping the original acquisition paperwork in order makes the eventual outbound transfer considerably smoother.
Q6. What if the property passes to heirs, or as a gift?
A Korean property can be subject to Korean inheritance or gift tax regardless of the nationality of the owner, decedent, or recipient.
Inheritance tax applies at a five-bracket progressive rate of 10–50%. What matters most is not the heir's nationality but whether the decedent was a Korean tax resident or non-resident at death: a resident decedent's worldwide estate is generally subject to Korean inheritance tax, while a non-resident decedent's Korean-situated assets generally are. A resident decedent's estate can generally draw on the standard basic deduction and spousal deduction; a non-resident decedent's estate is generally limited to a KRW 200M basic deduction plus certain appraisal-fee deductions, without the standard basic or spousal deductions available to residents. The filing deadline is generally six months from the end of the month in which death occurred, extended to nine months where the decedent or all heirs are non-residents.
Gift tax also applies at a 10–50% progressive rate. A non-resident recipient of Korean real estate is subject to Korean gift tax, generally without the spousal or lineal-relative deductions available to resident recipients, and the donor may bear joint liability for the tax where the recipient is a non-resident — worth reviewing before any gift is made. The filing deadline is generally three months from the end of the month of the gift.
Acquisition tax is separate from and in addition to inheritance or gift tax when real estate changes hands this way.
Q7. Should I hold the property under my own name, or through a company?
A corporate structure is not automatically the more efficient choice.
| Individual | Corporation | |
|---|---|---|
| Acquisition tax | 1–12% depending on house count/region | Generally 12% surcharge on housing |
| Comprehensive Real Estate Tax | KRW 900M or 1.2B deduction, case dependent | Generally no deduction |
| Rental income | Progressive income tax, 6–45% | Corporate tax, 10–25% |
| Disposal | Capital gains tax | Corporate tax, plus possible additional levy on housing gains |
| Running costs | Comparatively simple | Accounting, tax filing, corporate maintenance costs |
| Extracting proceeds | Sale proceeds go directly to the owner | Dividend, salary, or liquidation steps required |
Korea's 2026 corporate tax schedule runs 10–25% across brackets. A company disposing of housing can face an additional levy of roughly 20% on the gain, on top of ordinary corporate tax, and non-business-use land can carry its own additional levy. Comparing only "the individual top rate is 45%, the corporate rate is lower" misses the full cost: acquisition surcharge, loss of the Comprehensive Real Estate Tax deduction, the additional levy on disposal, tax at the point proceeds are extracted from the company, and ongoing accounting and compliance costs. A corporate structure tends to make sense where there are multiple investors, a genuine long-term leasing business, or active commercial asset management — not simply as a way to hold a single residence more cheaply.
Q8. Am I a resident or non-resident here, and does it actually matter?
The single most consequential distinction in this entire subject is not nationality — it is Korean tax residency.
Under Korean income tax law, a resident is generally someone who maintains a domicile in Korea, or a place of residence for 183 days or more. Day-count alone is not the whole test, however; tax authorities also weigh where a spouse and children live, domestic employment or business activity, ownership and actual use of Korean housing, the location of major assets, and whether circumstances suggest continued residence in Korea. Holding a foreign registration card or a particular visa type does not by itself establish tax residency.
A resident is generally taxed in Korea on worldwide income; a non-resident is generally taxed only on Korean-source income. Residency status directly affects eligibility for the single-house capital gains exemption, the long-term holding deduction, the Comprehensive Real Estate Tax joint-ownership special case, and inheritance-related deductions. One further nuance worth knowing: residency can be assessed differently under income tax law, foreign exchange law, and an applicable tax treaty — the three do not always align.
Q9. Will this be taxed twice — once in Korea, once at home?
It can be, without proper planning. Under the OECD Model Convention and most of Korea's bilateral tax treaties, income from real estate is generally taxable in the country where the property is located — so rental income and gains on a Korean property are generally taxable in Korea even for an owner who is a tax resident elsewhere.
Paying Korean tax does not automatically remove a home-country filing obligation. Double taxation is generally addressed through a foreign tax credit for Korean tax paid, an exemption under the applicable treaty or home-country law, or a credit limited to the corresponding home-country tax liability. The actual relief available is determined by the specific treaty between Korea and the country in question, and by home-country law — not by the OECD Model itself. Korean tax certificates, filed returns, and payment receipts should be retained; they are generally required to claim a foreign tax credit at home.
Ten Things to Confirm Before Signing Anything
- Exact nationality and, where relevant, place of incorporation
- Korean tax residency status — resident or non-resident
- Country of residence under the applicable tax treaty
- Existing Korean housing held by you and your spouse
- Any pre-sale rights, move-in rights, or residential officetels already held
- Whether the target property is residential, commercial, or classified as luxury housing
- Whether the property sits in a land transaction permission zone or requires foreign-acquisition permission
- The path by which offshore funds will enter Korea
- Intended purpose — residence, rental, or resale
- Your plan for eventually repatriating sale proceeds
There is no single "foreigner's tax rate" in Korean real estate. What actually determines the outcome is residency status, whether title sits with an individual or a company, house count, the property's use, its location, holding period, actual residence, and how funds move in and out of the country. High-end residential property in particular can touch several of these at once — luxury housing surcharges, the Comprehensive Real Estate Tax, non-resident capital gains treatment, inheritance tax, and outbound remittance — often in the same transaction.
A transaction of this kind is rarely just a matter of viewing a property and signing a contract. The safer approach is to review the full structure with a Korean tax accountant, an attorney, and a foreign exchange bank before acquiring, and to keep careful records — from the initial purchase through to the day proceeds eventually leave Korea.
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