Typical Taxes and Fees
When buying or selling a house in South Korea, you will incur several taxes and fees. These may include:
- Acquisition tax: This is a tax on the purchase price of the property and ranges from 0.6% to 4.6%.
- Registration tax: This tax is paid when registering the property transfer with the government and is calculated based on the property’s value. The rate is currently 2%.
- Real estate agent fees: If you use a real estate agent to sell or buy a property, you will need to pay their fees, which usually amount to around 0.5% to 1% of the property’s value.
Property Tax
In South Korea, property tax is levied by local governments and is based on the assessed value of the property. The tax rate ranges from 0.5% to 4% of the assessed value.
Capital Gains Tax (CGT)
If you sell a property in South Korea, you may be subject to capital gains tax. The tax rate is currently 6% and is applied to the difference between the sale price and the purchase price.
Inheritance Tax
In South Korea, inheritance tax is levied on the value of the inherited property. The tax rate depends on the value of the property and the relationship between the deceased and the heir.
Gift Tax
If you receive a gift of property in South Korea, you may be subject to gift tax. The tax rate depends on the value of the property and the relationship between the giver and the receiver.
Tax on Property Income
If you rent out your property in South Korea, you will be subject to tax on the rental income. The tax rate ranges from 6% to 42%, depending on the amount of rental income.
Tax Advantages
If you buy a house in South Korea and use it as your primary residence, you may be eligible for certain tax deductions. These include deductions for mortgage interest, property tax, and maintenance expenses. Additionally, if you are a first-time homebuyer, you may be eligible for a tax credit of up to KRW 50 million.