South Korea: Overview

RENTAL YIELDS

No yields information on South Korea

The average rental price of apartments in Seoul is around US$26.67 per sq. m. Villas are being rented out at the average rate of US$26.68 per sq. m.

There is insufficient information on prices of apartments and villas in South Korea.

Read Rental Yields  »

TAXES AND COSTS

South Korean taxes are from moderate to high

Effective Tax Rate on Rental Income
Monthly Income	US$1,500
Tax Rate	3.4%
Click here to see a worked example
Source: Disclaimer

Rental Income: Rental income tax is from 9% to 36% for limited liability companies and 13% and 25% for stock companies. Value Added Tax on gross rent is 10%.

Capital Gains: Capital gains taxes are around 9% to 36% for properties held for more than two years. To curb property speculation, capital gains tax on properties held for less than a year is 50%, and may reach 60% for second homes.

Inheritance: The inheritance tax is between 10% and 50% depending upon the property value.

Residents: Residents are taxed on their worldwide income at standard income tax rates.

Read Taxes and Costs  »

BUYING GUIDE

Buying costs are high in South Korea

Total roundtrip transaction costs can range from 20.57% to 22.42%. The realtor’s fee is regulated at a maximum of 0.6%, but actual payments are typically higher. The 10% Value Added Tax is imposed on all properties. Buyers must also purchase National Housing Bonds worth 5% of the property value; typically sold immediately at 10% to 15% discount. All costs are paid by the buyer.

Read Buying Guide  »

LANDLORD AND TENANT

South Korean landlords benefit from key money

The rental system in South Korea is pro-landlord.

Key Money: With any of the standard rental schemes, the landlord receives a huge amount of money up front, protecting him from erring tenants. In the 'wolse 2' system (the most common for expats), the entire rent is paid upfront, with no refund for early termination.

Tenant Security: Tenants are expected to move out of the property as soon as the lease term expires and the key money returned.

Read Landlord and Tenant  »

ECONOMIC GROWTH

South Korea's full- transition to first-world status

South Korea is the prosperous half of the Korean peninsula in north-eastern Asia. Korea was divided after World War II with the USSR-backed communist North Korea and the US-backed South Korea. In 1948, the Republic of Korea (South Korea) was proclaimed even with an ongoing war against the Democratic People’s Republic of Korea (north Korea).

South Korea became one of the world’s major economies during four decades of authoritarian rule, eventually shifting to multi-party politics in 1987. As a testament to its transition to first world status, Korea was admitted into the Organization for Economic Cooperation and Development (OECD) in 1996, the only Asian member aside from Japan.

Korea's rapid economic growth was interrupted by the Asian crisis that struck the region in October 1997. But the economy quickly rebounded GDP per capita was US$18,320 in 2006.

In February 2008, the pro-business President Lee Myung-bak took up office, having scored a record victory margin in December's presidential election with his "Economy, First!" pledge.

Lee was previously CEO of Hyundai Construction, and also a former mayor of Seoul. He is nicknamed "The Bulldozer" for his forcefulness, and aims to cut taxes, decrease bureaucracy, and free up the economy.