Acquisition Tax to Check When Buying
Acquisition tax is paid to the local government when you acquire real estate. For a paid acquisition of a home, the tax rate may vary based not only on the price but also on the number of homes owned, whether the property is in a designated adjustment area, and the reason for acquisition. Programs such as first-time homebuyer reductions also have eligibility requirements and limits, so check the laws in effect on the contract date and the guidance on Wetax.
Property Tax During Ownership
Property tax is imposed by the local government based on the owner as of June 1 each year. Tax notices for homes are generally issued in July and September, although a single notice may be issued when the tax amount is small. The actual tax may differ from simply multiplying the publicly announced property price by the tax rate because it reflects the publicly announced price, the fair market value ratio, tax rates, and the cap on tax increases.
Comprehensive Real Estate Tax Criteria
Comprehensive real estate tax is assessed by aggregating, by individual, the taxable real estate owned nationwide as of June 1. According to National Tax Service guidance, homes are assessed after deducting a basic exemption of 900 million won from the total publicly announced property price; qualifying single-home households receive a 1.2 billion won exemption. Land has different criteria for comprehensive aggregate land and separately aggregated land, so all land should not be assessed using one combined amount.
Capital Gains Tax to Check When Selling
Capital gains tax is calculated based on the profit remaining after subtracting the acquisition price and recognized necessary expenses from the transfer price. Depending on the holding period, number and location of homes, and residence requirements, tax exemption, deductions, and higher tax rates may vary. Owning one home per household does not automatically qualify you for a tax exemption; you must verify the requirements as of the transfer date.
Documents to Prepare Before Signing a Contract
Keep the sales contract, documentation for costs incurred at acquisition, and receipts for repairs that may qualify as necessary expenses. Before buying, it is advisable to calculate acquisition tax and annual property taxes separately; before selling, calculate the expected capital gain and review the tax exemption requirements. Joint ownership or a gift can significantly change the calculation, so you may need to consult a tax professional or the relevant authority.