Guide to Property Taxes in South Korea
Tax Rate on Rental Income (Non-resident Individual) |
|||
| Monthly Income | $1,500 | $6,000 | $12,000 |
| Tax Rate | 4.80% | 11.60% | 17.90% |
A nonresident foreign individual can generally acquire and own real estate directly in South Korea without establishing a Korean limited liability company. Foreign ownership is subject to the applicable real-estate acquisition, registration and foreign-exchange reporting requirements, and certain categories of land can be subject to additional restrictions or government permission.
Income Tax
A nonresident individual is generally subject to Korean income tax on Korean-source income, including income derived from real estate located in Korea.
The principal progressive national individual income-tax rates are:
Income Tax Rates for 2026
| Taxable Income (KRW) | Tax Rate |
| Up to 14 million | 6% |
| 14 million - 50 million | 15% |
| 50 million - 88 million | 24% |
| 88 million - 150 million | 35% |
| 150 million - 300 million | 38% |
| 300 million - 500 million | 40% |
| 500 million - 1 billion | 42% |
| Over 1 billion | 45% |
A local income tax equal to 10% of the national income-tax liability is imposed in addition to the national income tax. Consequently, the combined marginal rates are effectively 6.6% to 49.5% before considering other applicable rules.
Rental Income Tax
Rental income derived by a nonresident individual from Korean real estate is generally treated as Korean-source income.
Where the nonresident is required to report the income through an annual Korean tax return, the progressive individual income-tax rates generally apply to taxable rental income.
Tax is generally imposed on net taxable rental income, with qualifying expenses attributable to earning the rental income taken into account under the applicable Korean rules.
For a nonresident individual earning rental income from South Korean residential property, annual gross rental income of $18,000, $72,000 and $144,000 results in estimated total income tax of approximately $870, $8,323 and $25,809, respectively.
The calculation assumes deductible rental expenses equal to 30% of gross rental income, resulting in net rental income of $12,600, $50,400 and $100,800. The 30% expense assumption is illustrative rather than a fixed statutory Korean deduction.
After applying the available KRW 1.5 million personal deduction, taxable rental income is subject to South Korea's progressive 6%–45% national individual income-tax rates. Local income tax equal to 10% of the national income-tax liability is then added.
Under these assumptions, the combined national and local income-tax burden represents approximately 4.8%, 11.6% and 17.9% of gross rental income at the three respective income levels.
Capital Gains Tax
A nonresident individual's gain from the disposal of Korean real estate is generally subject to Korean capital gains tax.
The taxable gain is broadly calculated by deducting the property's tax-recognized acquisition cost and qualifying acquisition, improvement and disposal expenses from the sale proceeds.
Capital gains on real estate can be subject to progressive taxation, with the precise treatment depending on factors including the type of property, holding period and number of properties owned.
Qualifying property can benefit from a long-term holding deduction, although the available deduction and applicable limitations depend on the property and circumstances.
A basic KRW 2.5 million capital-gains deduction may also apply. This is an annual basic deduction rather than KRW 2.5 million multiplied by each year the property was held.
Special and potentially higher rates can apply to certain short-term disposals, multiple-home owners and properties falling within designated categories.
Corporate Taxation
Where Korean real estate is held through a Korean corporation, rental profits and taxable gains are generally included in the company's taxable income.
For fiscal years beginning on or after 1 January 2026, the principal Korean corporate income-tax rates are:
| Taxable Income (KRW) | Tax Rate |
| Up to 200 million | 10% |
| 200 million – 20 billion | 20% on the band over KRW 200 million |
| Over 20 billion | 22% on the band over KRW 20 billion |
| Over 300 billion | 25% on income over KRW 300 billion |
These are national corporate income-tax rates. Local income tax applies in addition, so the national corporate rate alone does not represent the company's entire income-tax burden.
Qualifying business expenses, including depreciation, property-related taxes, financing costs and other expenses incurred in generating taxable rental income, can generally be deductible subject to Korean tax rules.
Buying and Selling Costs
| Transaction Costs | ||
| Who Pays? | ||
| Property Transfer Tax | 1.00% - 12.00% | buyer |
| Legal Fees | 0.50% - 1.00% | buyer |
| Real Estate Agent Fee | 0.50% 0.50% |
buyer seller |
| Costs Paid by Buyer | 2.00% - 13.50% | |
| Costs Paid by Seller | 0.50% | |
| ROUNDTRIP TRANSACTION COSTS | 2.50% - 14.00% | |
| Source: Global Property Guide, PWC, KPMG | ||
Annual Property Taxes
South Korea imposes an annual local property tax on real estate. Depending on the type of property, the applicable rates can range from approximately 0.07% to 5% of the statutory tax base.
In addition, owners of residential property and certain land whose aggregated statutory values exceed applicable thresholds can be subject to the national Comprehensive Real Estate Holding Tax.
This additional holding tax generally applies at progressive rates and depends on factors including the type, number and aggregated statutory value of the properties owned.
Accordingly, the annual holding cost of a Korean investment apartment can include both local property tax and, where the applicable thresholds are exceeded, Comprehensive Real Estate Holding Tax.
Annual property tax: generally around 0.1%–0.4% of the statutory taxable value, resulting in a lower effective percentage of the apartment's actual market value.
