Korea tax guide
Capital Gains Tax on Korean Property for Foreigners
Income Tax
Who this guide is for
- Foreign owners selling an apartment or land in Korea
- Non-residents disposing of Korean property
- Expats planning to leave after a sale
- Buyers dealing with a non-resident seller
Quick Answer
A foreigner who sells Korean real estate can have Korean capital gains tax even if living overseas. The gain generally depends on sale proceeds, verified acquisition cost, recognized improvement and transaction costs, holding period, property type, residence status, and available deductions or special rules. A preliminary return is generally due within two months after the end of the month of sale.
Key points
- Korean real estate gains can be taxable for residents and non-residents.
- Tax applies to gain, not the full sale price.
- Residence status can affect deductions, exemptions, and procedure.
- Corporation buyers can have withholding duties in specified non-resident transactions.
- The preliminary return deadline is short.
Step-by-step explanation
Confirm the taxable event and seller status
Identify the legal transfer date, property type, ownership percentage, and whether the seller is a Korean tax resident. Review any treaty, but expect Korea to retain taxing rights over gains from Korean real estate in many cases.
Reconstruct basis and costs
Collect the original purchase contract, acquisition tax, registration and legal fees, brokerage, and supported capital improvements. Routine repairs, financing costs, and unsupported cash payments should not be assumed deductible.
Test special rules separately
Principal-home exemptions, multiple-home rules, holding-period deductions, unregistered assets, and non-resident limitations can materially change the result. Do not estimate tax using only the headline progressive rate.
Prepare before closing
The buyer, escrow professional, or bank may request tax documents, especially when the seller is overseas. Confirm withholding, remittance, certificate, and filing requirements before the final settlement, then protect the two-month preliminary return deadline.
Documents you may need
- Purchase and sale contracts
- Acquisition tax and registration records
- Brokerage and legal invoices
- Capital improvement evidence
- Residence and occupancy records
- Mortgage and settlement statements
- Prior property tax filings
Common mistakes
- Assuming no tax because the seller lives abroad
- Losing proof of acquisition and improvement costs
- Assuming a principal-home rule applies equally to a non-resident
- Missing buyer withholding questions
- Waiting until the annual May filing period
When should you ask a tax professional?
Ask a qualified tax professional if you have income from several countries, business income, unclear tax residency, treaty questions, missing documents, late filing concerns, or a visa situation that depends on tax records. This site explains general patterns only and cannot review your personal facts.
FAQ
Can a non-resident owe Korean tax on a Korean apartment sale?
Yes. Korean real estate is within the Korean capital gains tax scope, subject to the specific calculation and treaty.
Is tax charged on the whole sale price?
The tax is generally based on calculated gain after recognized basis and costs, then adjusted under applicable deductions and rates.
When is the preliminary return due?
The NTS filing table states that the preliminary return is due no later than two months from the last day of the month in which the asset was sold.
Does the buyer withhold tax?
A corporate buyer can have withholding duties in specified purchases from a non-resident or foreign corporation without a Korean business place. The parties should confirm before settlement.
Official Sources to Verify
Tax rules and filing procedures in Korea may change depending on your visa status, income type, tax residency, and the tax year. Before making a tax decision, always verify your situation with official sources or a qualified professional.