2026 Real Estate Tax, Real Estate Tax Savings, Residential Lease, Commercial Lease Property Tax, Capital Gains Tax, Gift Tax, Real Estate Lease Tax Practices
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Description
Book Introduction
This book is a concise summary of tax issues related to real estate leasing, compiled by the author based on his 20 years of experience providing tax consulting (easy explanation) to real estate leasing business operators, corporate tax accountants, and tax accounting firm employees.
index
[Part 1] Capital gains tax, etc.
SECTION 1 REAL ESTATE TAX CHECKOUT TABLE
Capital gains tax rate
Basic income tax rate
Gift tax or inheritance tax rate
Acquisition tax rate summary table
SECTION 2 2022.
5. 10.
Subsequent tax law amendments
Extension of the temporary exemption period for capital gains tax overtaxation
Revision of the 2-year holding period for first-generation, single-home transfer income tax exemption
Temporary relaxation of requirements for exemption from second home transfer income tax
SECTION 3 Tax Exemption on Transfer Income from 1st Generation 1st Home
1st generation and when to include in 1st generation
If not included in the 1st generation
Scope of housing and 1 house per generation
Tax-exempt 1-generation 1-home and holding period
Special tax exemption for mutual rental housing
SECTION 4 1st Generation 1 House Special Provision (Temporary 2 Houses, etc.)
If you temporarily own two homes due to moving
Deadline for disposal of previous homes subject to temporary tax exemption in regulated areas
In cases where tax exemption is applied even though it is a second home
Tax benefits for those who own inherited houses and general houses
SECTION 5 Designation, removal, and temporary exclusion of areas subject to adjustment and excessive taxation
Temporary exemption from imposition of capital gains tax on houses located in regulated areas
Summary of tax exemption for one house per household in regulated areas
Designation and removal of regulated areas
Things that change when the regulated area is lifted
- Exclusion from the 2-year residency requirement for the 1st generation, 1st home tax exemption
- Overtaxation of acquisition tax
- Relaxation of loan regulations (if contract is signed after the release date)
- Allowing mortgage loans in areas regulated for multiple homeowners, etc.
- Relaxation of restrictions on the period of exclusive sales
SECTION 6 Transfer income tax on subscription rights
Income tax on transfer of subscription rights
Tax exemption for acquisition of subscription rights and transfer of existing houses
Whether acquisition of subscription rights and acquisition tax are overtaxed
SECTION 7 Transfer income tax on occupancy rights
Tax exemption for one house per household and one house per cooperative member
Transfer income tax on cooperative member's right to reside
SECTION 8 Acquisition tax on mixed-use housing, capital gains tax, etc.
Taxes related to the acquisition of commercial housing
Taxes related to the transfer of commercial and residential properties
In case the total floor area of a commercial-residential building is large, one house per household is applied.
Distinguishing between the housing price and the commercial price when selling a commercial house
Tax savings and tax risks for transfer income from multi-purpose housing
SECTION 9 Imposition of income tax on transfer of non-commercial land
10% surtax on non-business land transfer income
Types of non-commercial land
Land excluded from non-commercial use
Determination of non-commercial land
Determination of non-business use of agricultural land entrusted to the Korea Rural Community Corporation
Whether the inherited agricultural land is for business use
Long-term holding special deduction and tax rate for non-commercial land
Basic tax rate for non-business land
Capital gains tax rate when transferring non-business land and business land
SECTION 10 Tax exemption, reduction, etc. for self-cultivated farmland for 8 years or more
Self-governing farmland and village
Tax reduction for inherited or gifted farmland
Capital gains tax reduction limit
Reduction of capital gains tax on land for public projects, etc.
SECTION 11 Precautions when calculating capital gains tax, tax savings
When transferring two or more items under one contract
If the gifted asset is transferred within 10 years
When a business owner transfers real estate for business purposes
Denial of unfair calculation of transfer income (low or high price transfer)
Precautions when transferring between direct ascendants and descendants or spouses
Tax-saving strategies such as capital gains tax
Discount on acquisition of unsold and newly built houses during a specific period
SECTION 12 REPORTING AND PAYMENT OF TRANSFER INCOME TAX
Transfer amount
Necessary expenses for transfer income
Basic deduction for capital gains
Long-term holding special deduction
Capital gains tax base and tax rate
Capital gains tax reporting and payment
SECTION 13 ACQUISITION TAX AND AMENDMENTS
Acquisition tax rate, reporting, and payment
Number of houses and whether there is an overtaxation related to acquisition tax
Amendments to the tax law related to acquisition tax
Miscellaneous expenses related to home acquisition
SECTION 14 Comprehensive Real Estate Tax, Property Tax
Comprehensive real estate tax payers and taxable entities
Comprehensive real estate tax base and tax rate
Comprehensive real estate tax for first-generation single-home owners
Tax deduction for first-generation single-home owners
Cases where you can receive a deduction for owning two or one home
Houses excluded from the comprehensive real estate tax
Comprehensive real estate tax notification and payment
Property tax rates and payment deadlines
[Part 2] Gift Tax and Inheritance Tax
SECTION 1 Gift Tax and Gift Property Deduction
Gift property deduction and gift tax base
Establishment of a new deduction for gift property resulting from marriage
Gift tax exemption for start-up capital
Expanding the Gift Tax Benefits for Business Succession
Gift tax reporting and payment
Investigation of the source of funds for donations
Burdened gift and capital gains tax
SECTION 2 Inheritance Tax and Inheritance Deductions
Inheritance
Amount deducted from inherited property
Basic deduction and lump-sum deduction for inherited property
Renunciation of inheritance and limited acceptance
[Part 3] Commercial and Officetel Taxes
SECTION 1 REGISTRATION OF REAL ESTATE LEASURE BUSINESS
Business and business registration application
Business classification and business registration correction
Distinction between general and simplified real estate rental business operators
Laws to know when leasing commercial space
SECTION 2 REAL ESTATE LEASURE BUSINESS VAT REPORTING AND PAYMENT
Value-added tax on rental income from real estate rental business
Value-added tax on rental (lease) deposits
Issuance of real estate rental business tax invoices
Real estate rental business value-added tax reporting and payment
Documents to be submitted when reporting value-added tax for real estate rental businesses
Post-deadline VAT reporting and amendment reporting
Tax bomb case study of real estate rental business
Real estate rental business (simplified taxpayer) value-added tax
Calculation of value-added tax for real estate rental business for simplified taxpayers
Value-added tax reporting and payment for simplified taxpayers
Conversion of general taxpayers (real estate rental business) to simplified taxpayers
Waiver of simplified taxation for real estate rental businesses
Value added tax when renting free of charge or at a low price to a special related party
Gift tax when renting free of charge or at a low price to a special related party
Tax-saving measures for free use of real estate between special related parties
SECTION 3 Officetel Tax
Tax Overview Related to Officetel Rental
Officetel use and value-added tax
When renting or using an officetel as a residence
Officetel purchase and value-added tax
Officetel acquisition tax
Officetel property tax
Officetel Comprehensive Real Estate Tax
Officetel transfer and capital gains tax
Value-added tax on transfer of officetel for business use
Officetel long-term rental housing registration tax savings, etc.
Change of use of officetels and tax issues
Officetel rental income tax
Residential officetel rental tax
SECTION 4 Transfer of commercial buildings and closure of real estate rental business
Collection and payment of value-added tax
When a general taxpayer transfers a commercial building
When a temporary business operator transfers a commercial building
In case of closing a real estate rental business without transferring the building
Building depreciation expense is deducted from the acquisition price of the transfer income.
Matters to note regarding comprehensive transfer and taxation
In cases where it does not fall under comprehensive transfer
Comprehensive transfer and proxy payment
[Part 4] Comprehensive Income Tax on Commercial Leases
SECTION 1 Real Estate Rental Comprehensive Income Tax Reporting and Payment
Comprehensive Income Tax Overview
Business income and income deductions for real estate rental businesses
Total income, necessary expenses
Loss carryforward (deducted from income)
Business income amount
Comprehensive income amount
Comprehensive income of pension income, etc.
Income deduction (personal deduction)
Comprehensive income tax base, tax rate, and calculated tax amount
Pension account tax deduction
Tax deduction for landlords who reduce commercial rent
Comprehensive income tax return types
Double-entry bookkeeping and double-entry bookkeeping obligation business operators
Simplified bookkeeping target
Honest Reporting Confirmation System and Businesses Subject to Honest Reporting Confirmation
Comprehensive income tax filing and payment deadline
SECTION 2 Comprehensive Income Tax Reporting Using Simple Bookkeeping
Simple ledger preparation
Total income (real estate rental business)
Inclusion of the total income amount of the deemed rent for the rental deposit
Deemed rent included in income when filing an estimated report
Necessary expenses
Comprehensive income tax return preparation for simplified bookkeeping subjects
Preparation of a statement of total income and necessary expenses, etc.
Proof of expenditure and regular receipt for necessary expenses
SECTION 3 Estimated Comprehensive Income Tax Report for Real Estate Rental Businesses
Estimated report for simplified bookkeeping subjects
Expense rate applied when reporting an estimate
Calculation of estimated income amount using simple expense ratio
Estimated income amount based on the standard expense ratio of the simplified bookkeeping subject
Procedure for preparing a comprehensive income tax return for prospective taxpayers
Estimated report by double-entry bookkeeping officer
Estimated report for new real estate rental business operators
Notes on Comprehensive Income Tax Reporting for Joint Venture Businesses
[Part 5] Comprehensive Income Tax on Housing Rental
SECTION 1 Comprehensive Income Tax on Housing Rental Income
Overview of Housing Rental Income Taxation
Definition of housing and calculation of housing number
Combined housing ownership and comprehensive income tax reporting and payment
If a couple owns only one house
If a couple owns two houses together
If a couple owns three or more houses combined
Combined number of houses for a married couple and separate filing of comprehensive income tax
Rental income from multi-family homes, multi-generational homes, and officetels
Application for registration as a housing rental business operator
Obligation to submit a report on the status of housing rental business establishments
Comprehensive income tax return for housing rental income, etc.
Deemed rent for housing deposit
Method of calculating the deemed rent for a house
Separate taxation of housing rental income
Separately taxed housing rental income income amount and tax base
Comprehensive taxation, separate taxation, and tax calculation structure for housing rental income
Comprehensive Income Tax Reporting Methods by Housing Rental Business Size
If your rental income is less than 20 million won and you only have a public pension
Estimated report of housing rental income
Reporting and payment, etc. according to the accounting records of the housing rental business
Income tax reduction for small home rental business operators
SECTION 2 Tax Benefits for Long-Term General Private Rental Housing
Tax benefits for long-term general private rental housing
Long-term rental housing tax revision law
Summary of Rental Housing Tax Benefits and Revisions
Exclusion from the comprehensive real estate tax for long-term rental housing
[Part 6] Laws and Regulations Related to Housing Leases, etc.
SECTION 1 Residential Tenancy Protection Act
Partial Amendment to the Housing Lease Protection Act
Local government (city, county, district) rental registration
(General Lease) Summary of the Housing Lease Protection Act
Partial Amendment to the Act on Reporting Real Estate Transactions, etc.
SECTION 2 REGISTERED RENTAL HOUSING AND OBLIGATORY REQUIREMENTS
Obligations related to registered rental housing in cities, counties, and districts
Lease contract reporting, etc. and explanation obligation
Obligations when transferring registered rental housing in a city, county, or district
Rental business operator health insurance premiums, dependent eligibility requirements, etc.
SECTION 1 REAL ESTATE TAX CHECKOUT TABLE
Capital gains tax rate
Basic income tax rate
Gift tax or inheritance tax rate
Acquisition tax rate summary table
SECTION 2 2022.
5. 10.
Subsequent tax law amendments
Extension of the temporary exemption period for capital gains tax overtaxation
Revision of the 2-year holding period for first-generation, single-home transfer income tax exemption
Temporary relaxation of requirements for exemption from second home transfer income tax
SECTION 3 Tax Exemption on Transfer Income from 1st Generation 1st Home
1st generation and when to include in 1st generation
If not included in the 1st generation
Scope of housing and 1 house per generation
Tax-exempt 1-generation 1-home and holding period
Special tax exemption for mutual rental housing
SECTION 4 1st Generation 1 House Special Provision (Temporary 2 Houses, etc.)
If you temporarily own two homes due to moving
Deadline for disposal of previous homes subject to temporary tax exemption in regulated areas
In cases where tax exemption is applied even though it is a second home
Tax benefits for those who own inherited houses and general houses
SECTION 5 Designation, removal, and temporary exclusion of areas subject to adjustment and excessive taxation
Temporary exemption from imposition of capital gains tax on houses located in regulated areas
Summary of tax exemption for one house per household in regulated areas
Designation and removal of regulated areas
Things that change when the regulated area is lifted
- Exclusion from the 2-year residency requirement for the 1st generation, 1st home tax exemption
- Overtaxation of acquisition tax
- Relaxation of loan regulations (if contract is signed after the release date)
- Allowing mortgage loans in areas regulated for multiple homeowners, etc.
- Relaxation of restrictions on the period of exclusive sales
SECTION 6 Transfer income tax on subscription rights
Income tax on transfer of subscription rights
Tax exemption for acquisition of subscription rights and transfer of existing houses
Whether acquisition of subscription rights and acquisition tax are overtaxed
SECTION 7 Transfer income tax on occupancy rights
Tax exemption for one house per household and one house per cooperative member
Transfer income tax on cooperative member's right to reside
SECTION 8 Acquisition tax on mixed-use housing, capital gains tax, etc.
Taxes related to the acquisition of commercial housing
Taxes related to the transfer of commercial and residential properties
In case the total floor area of a commercial-residential building is large, one house per household is applied.
Distinguishing between the housing price and the commercial price when selling a commercial house
Tax savings and tax risks for transfer income from multi-purpose housing
SECTION 9 Imposition of income tax on transfer of non-commercial land
10% surtax on non-business land transfer income
Types of non-commercial land
Land excluded from non-commercial use
Determination of non-commercial land
Determination of non-business use of agricultural land entrusted to the Korea Rural Community Corporation
Whether the inherited agricultural land is for business use
Long-term holding special deduction and tax rate for non-commercial land
Basic tax rate for non-business land
Capital gains tax rate when transferring non-business land and business land
SECTION 10 Tax exemption, reduction, etc. for self-cultivated farmland for 8 years or more
Self-governing farmland and village
Tax reduction for inherited or gifted farmland
Capital gains tax reduction limit
Reduction of capital gains tax on land for public projects, etc.
SECTION 11 Precautions when calculating capital gains tax, tax savings
When transferring two or more items under one contract
If the gifted asset is transferred within 10 years
When a business owner transfers real estate for business purposes
Denial of unfair calculation of transfer income (low or high price transfer)
Precautions when transferring between direct ascendants and descendants or spouses
Tax-saving strategies such as capital gains tax
Discount on acquisition of unsold and newly built houses during a specific period
SECTION 12 REPORTING AND PAYMENT OF TRANSFER INCOME TAX
Transfer amount
Necessary expenses for transfer income
Basic deduction for capital gains
Long-term holding special deduction
Capital gains tax base and tax rate
Capital gains tax reporting and payment
SECTION 13 ACQUISITION TAX AND AMENDMENTS
Acquisition tax rate, reporting, and payment
Number of houses and whether there is an overtaxation related to acquisition tax
Amendments to the tax law related to acquisition tax
Miscellaneous expenses related to home acquisition
SECTION 14 Comprehensive Real Estate Tax, Property Tax
Comprehensive real estate tax payers and taxable entities
Comprehensive real estate tax base and tax rate
Comprehensive real estate tax for first-generation single-home owners
Tax deduction for first-generation single-home owners
Cases where you can receive a deduction for owning two or one home
Houses excluded from the comprehensive real estate tax
Comprehensive real estate tax notification and payment
Property tax rates and payment deadlines
[Part 2] Gift Tax and Inheritance Tax
SECTION 1 Gift Tax and Gift Property Deduction
Gift property deduction and gift tax base
Establishment of a new deduction for gift property resulting from marriage
Gift tax exemption for start-up capital
Expanding the Gift Tax Benefits for Business Succession
Gift tax reporting and payment
Investigation of the source of funds for donations
Burdened gift and capital gains tax
SECTION 2 Inheritance Tax and Inheritance Deductions
Inheritance
Amount deducted from inherited property
Basic deduction and lump-sum deduction for inherited property
Renunciation of inheritance and limited acceptance
[Part 3] Commercial and Officetel Taxes
SECTION 1 REGISTRATION OF REAL ESTATE LEASURE BUSINESS
Business and business registration application
Business classification and business registration correction
Distinction between general and simplified real estate rental business operators
Laws to know when leasing commercial space
SECTION 2 REAL ESTATE LEASURE BUSINESS VAT REPORTING AND PAYMENT
Value-added tax on rental income from real estate rental business
Value-added tax on rental (lease) deposits
Issuance of real estate rental business tax invoices
Real estate rental business value-added tax reporting and payment
Documents to be submitted when reporting value-added tax for real estate rental businesses
Post-deadline VAT reporting and amendment reporting
Tax bomb case study of real estate rental business
Real estate rental business (simplified taxpayer) value-added tax
Calculation of value-added tax for real estate rental business for simplified taxpayers
Value-added tax reporting and payment for simplified taxpayers
Conversion of general taxpayers (real estate rental business) to simplified taxpayers
Waiver of simplified taxation for real estate rental businesses
Value added tax when renting free of charge or at a low price to a special related party
Gift tax when renting free of charge or at a low price to a special related party
Tax-saving measures for free use of real estate between special related parties
SECTION 3 Officetel Tax
Tax Overview Related to Officetel Rental
Officetel use and value-added tax
When renting or using an officetel as a residence
Officetel purchase and value-added tax
Officetel acquisition tax
Officetel property tax
Officetel Comprehensive Real Estate Tax
Officetel transfer and capital gains tax
Value-added tax on transfer of officetel for business use
Officetel long-term rental housing registration tax savings, etc.
Change of use of officetels and tax issues
Officetel rental income tax
Residential officetel rental tax
SECTION 4 Transfer of commercial buildings and closure of real estate rental business
Collection and payment of value-added tax
When a general taxpayer transfers a commercial building
When a temporary business operator transfers a commercial building
In case of closing a real estate rental business without transferring the building
Building depreciation expense is deducted from the acquisition price of the transfer income.
Matters to note regarding comprehensive transfer and taxation
In cases where it does not fall under comprehensive transfer
Comprehensive transfer and proxy payment
[Part 4] Comprehensive Income Tax on Commercial Leases
SECTION 1 Real Estate Rental Comprehensive Income Tax Reporting and Payment
Comprehensive Income Tax Overview
Business income and income deductions for real estate rental businesses
Total income, necessary expenses
Loss carryforward (deducted from income)
Business income amount
Comprehensive income amount
Comprehensive income of pension income, etc.
Income deduction (personal deduction)
Comprehensive income tax base, tax rate, and calculated tax amount
Pension account tax deduction
Tax deduction for landlords who reduce commercial rent
Comprehensive income tax return types
Double-entry bookkeeping and double-entry bookkeeping obligation business operators
Simplified bookkeeping target
Honest Reporting Confirmation System and Businesses Subject to Honest Reporting Confirmation
Comprehensive income tax filing and payment deadline
SECTION 2 Comprehensive Income Tax Reporting Using Simple Bookkeeping
Simple ledger preparation
Total income (real estate rental business)
Inclusion of the total income amount of the deemed rent for the rental deposit
Deemed rent included in income when filing an estimated report
Necessary expenses
Comprehensive income tax return preparation for simplified bookkeeping subjects
Preparation of a statement of total income and necessary expenses, etc.
Proof of expenditure and regular receipt for necessary expenses
SECTION 3 Estimated Comprehensive Income Tax Report for Real Estate Rental Businesses
Estimated report for simplified bookkeeping subjects
Expense rate applied when reporting an estimate
Calculation of estimated income amount using simple expense ratio
Estimated income amount based on the standard expense ratio of the simplified bookkeeping subject
Procedure for preparing a comprehensive income tax return for prospective taxpayers
Estimated report by double-entry bookkeeping officer
Estimated report for new real estate rental business operators
Notes on Comprehensive Income Tax Reporting for Joint Venture Businesses
[Part 5] Comprehensive Income Tax on Housing Rental
SECTION 1 Comprehensive Income Tax on Housing Rental Income
Overview of Housing Rental Income Taxation
Definition of housing and calculation of housing number
Combined housing ownership and comprehensive income tax reporting and payment
If a couple owns only one house
If a couple owns two houses together
If a couple owns three or more houses combined
Combined number of houses for a married couple and separate filing of comprehensive income tax
Rental income from multi-family homes, multi-generational homes, and officetels
Application for registration as a housing rental business operator
Obligation to submit a report on the status of housing rental business establishments
Comprehensive income tax return for housing rental income, etc.
Deemed rent for housing deposit
Method of calculating the deemed rent for a house
Separate taxation of housing rental income
Separately taxed housing rental income income amount and tax base
Comprehensive taxation, separate taxation, and tax calculation structure for housing rental income
Comprehensive Income Tax Reporting Methods by Housing Rental Business Size
If your rental income is less than 20 million won and you only have a public pension
Estimated report of housing rental income
Reporting and payment, etc. according to the accounting records of the housing rental business
Income tax reduction for small home rental business operators
SECTION 2 Tax Benefits for Long-Term General Private Rental Housing
Tax benefits for long-term general private rental housing
Long-term rental housing tax revision law
Summary of Rental Housing Tax Benefits and Revisions
Exclusion from the comprehensive real estate tax for long-term rental housing
[Part 6] Laws and Regulations Related to Housing Leases, etc.
SECTION 1 Residential Tenancy Protection Act
Partial Amendment to the Housing Lease Protection Act
Local government (city, county, district) rental registration
(General Lease) Summary of the Housing Lease Protection Act
Partial Amendment to the Act on Reporting Real Estate Transactions, etc.
SECTION 2 REGISTERED RENTAL HOUSING AND OBLIGATORY REQUIREMENTS
Obligations related to registered rental housing in cities, counties, and districts
Lease contract reporting, etc. and explanation obligation
Obligations when transferring registered rental housing in a city, county, or district
Rental business operator health insurance premiums, dependent eligibility requirements, etc.
Detailed image
Into the book
■ Tax-exempt special provisions for mutual rental housing
What is Sangsaeng Rental Housing?
If a first generation person enters into a lease agreement for a house in the regulated area between December 20, 2021 and December 31, 2024 (meeting certain requirements → lease for 2 years or more, etc.) and does not own another house (if owning a house other than the rental house, after disposing of all other houses)
If the rental house and the owned house meet the temporary two-home requirement, and the rental house is disposed of, even if the house is located in a regulated area, the one-household-one-home tax exemption can be applied as long as it is owned for more than two years.
■ If you temporarily own two houses due to moving
Temporary second home tax exemption requirements → 1 year after acquisition
If a household that owned one house (previous house) temporarily owns two houses by purchasing a new house more than one year after purchasing the previous house, the previous house is exempt from tax if sold within three years from the date of purchase of the new house.
However, the previous home ownership period must be at least 2 years.
■ Tax exemptions for those who own inherited houses and general houses
Transfer of general housing → Tax exemption if the requirement of one house per household is met
If a household that owns one house in Korea, one inherited from the deceased who was a separate household at the time of commencement of inheritance, and one general house (only applicable to the house owned at the time of commencement of inheritance) transfers the general house, it is considered as owning one house in Korea and can be exempted from taxation if the holding period is 2 years or more (2 years of residence in the area subject to adjustment).
[Article 155, Paragraph 2 of the Income Tax Act]
▶ Inherited houses subject to special provisions in cases where the deceased has two or more houses
If the deceased owned two or more houses at the time of commencement of inheritance, the special inheritance housing exception applies only to the house that the deceased owned for the longest period.
[Revised Tax Law] Exclusion of Tax Exemption Exceptions for Pre-Gifted Housing
(Article 155, Paragraph 2, Article 156-2, Paragraphs 6 and 7 of the Enforcement Decree of the Income Tax Act)
A house received as a gift from the deceased within two years from the date of commencement of inheritance is not considered a 'general house' and is excluded from tax exemption.
▶If the inherited house is jointly owned
In the case of a person who owns a jointly inherited house and a general house, when applying the special provision of one house per household, when transferring a house other than the jointly inherited house, the minority shareholder, excluding the person with the largest inheritance share, shall not regard the jointly inherited house as the house of the resident in question.
However, if there are two or more persons with the largest share of inheritance, the person who falls under each of the following items in the order listed below among those two or more persons is deemed to own the jointly inherited house.
[Article 155, Paragraph 2, Section 3 of the Income Tax Act]
1.
Person residing in the house in question
2.
oldest
▶ Special tax exemption for one house per household in cases where a general house acquired after inheriting a rural house located in a town or village outside the metropolitan area where the deceased lived for more than 5 years is transferred.
If the inherited house is a rural house located in a township (excluding areas within urban areas) or a township outside the metropolitan area, and the inheritor has lived in the rural house for more than 5 years after acquisition, and then acquires and transfers a general house, the tax exemption of one house per household may be applied.
(Article 155, Paragraph 7 of the Enforcement Decree of the Income Tax Act)
▶Tax exemption for inherited houses and temporary second homes
When a household that owns an inherited house and another house (general house) at the time of commencement of inheritance acquires another house more than one year after acquiring the general house and transfers the general house that satisfies the non-tax requirements within three years from the date of acquisition, the special provision for one house per household applies.
A house inherited from a member of the same generation → Taxed as a second home when transferring an inherited house or general house
A house inherited from a member of the same generation cannot be considered an inherited house and therefore is not subject to the tax exemption provisions.
However, if two houses are owned due to combining generations for the purpose of cohabitation and support, the general house is exempted from taxation as a special case of one house per generation.
(Transfer, Written-2015-Real Estate-0803, June 22, 2015)
If the inherited house is transferred first among the inherited house and the general house → capital gains tax is levied.
If you own a regular house and then transfer the inherited house first, you are considered a second-home owner and are subject to capital gains tax.
■ Comprehensive income of pension income, etc.
Public pension (national pension, civil servant pension, military pension, teacher pension, etc.)
① Tax is levied only on the amount of pension received after 2002, and if there is other comprehensive income subject to combined taxation, such as business income or earned income, it must be reported by combining it with the comprehensive income.
▶ Taxable conversion amount of public pension
Total receipt amount × (2002.
1. 1.
(Number of months of payment since then / Total number of months of payment)
▶ Withholding of pension income tax on public pension income
After withholding tax at source every month according to the simplified pension income tax table (withholding tax only when monthly pension amount exceeds 640,000 won), year-end tax settlement is made in January of the following year for the total annual pension income, similar to year-end tax settlement for earned income.
[Pension payment amount - Pension income deduction amount - Personal deduction - Standard tax deduction] × Basic tax rate (6% for up to KRW 12 million per year, 15% for over KRW 12 million and up to KRW 46 million) - Prepaid tax amount (Total amount of tax withheld each month) = Additional collection or refund
♣ If you have public pension income, such as national pension, and earned or business income, you must combine them and file a comprehensive income tax return.
▶ If you only have rental income and public pension income such as national pension
If your annual rental income is less than 20 million won and you only have public pension income such as the national pension, and you report the rental income as separate taxation, you do not need to report the comprehensive income tax by combining the national pension and rental income.
▶ Private pension (financial institution pension, etc.)
In the case of private pensions (insurance company, financial institution pension, etc.), if the taxable pension income is less than 12 million won per year, it is not included in the comprehensive income. However, if it exceeds 12 million won per year, it must be included in the comprehensive income.
(Article 14, Paragraph 3, Subparagraph 9 of the Income Tax Act)
▶ Pension income (Article 20-3 of the Income Tax Act) → The taxable pension income amount can be confirmed at the pension management institution.
1.
Pension account deposit amount that has been deducted from earned income, business income, etc. for pension deposit amount (Article 59-3, Paragraph 1 of the Income Tax Act)
2.
Increased amount based on pension account performance
■ Combined housing ownership and comprehensive income tax reporting and payment
□ If the couple owns only one house
If a couple owns only one house, they are not taxed regardless of the rental income.
However, if you rent out an expensive house with a standard market price exceeding KRW 900 million (KRW 1.2 billion after 2023, including multi-family housing) as of the end of the tax period, you must report and pay comprehensive income tax or include it in your comprehensive income.
□ Cases where taxation is imposed even if a married couple jointly owns only one house
1.
A house whose standard market price as of the end of the tax period exceeds KRW 900 million (KRW 1.2 billion after 2023)
2.
Houses located overseas
□ If a couple owns two houses combined
If you only have a rental deposit, you are not subject to comprehensive income tax reporting, but if you have monthly rental income, you must report and pay comprehensive income tax.
□ If a couple owns three or more houses combined
If you own three or more houses and have rental income, you must report and pay comprehensive income tax.
However, if a house with a residential area of 40 square meters or less and a standard period of 200 million won or less is rented out by receiving only a rental deposit, it is excluded from the number of houses, and the deemed rent is not calculated for the rental deposit.
◈ Combined number of houses for a couple and separate comprehensive income tax returns
In the case of a married couple, the number of houses is calculated by adding them together, but rental income is calculated separately, so the husband and spouse must each report and pay comprehensive income tax on their rental income.
◈ Tax exemption for houses owned by each spouse, etc.
? Number of houses: Combined number of couples
? Rental Income Calculation and Comprehensive Income Tax Reporting and Payment: Separate for Spouses
■ Comprehensive income tax reporting method by housing rental business size
□ If the total rental income for the current year is less than 20 million won
When filing a comprehensive income tax return, you can choose between separate taxation or comprehensive taxation. If you choose separate taxation and file a return, you will only calculate and pay taxes separately for housing rental income, and it will not be combined with other income. Therefore, for those with a high tax burden due to a large amount of earned income or other business income, the tax saving effect is significant.
Therefore, in the case of high-income earners, the best way to reduce taxes is to report and pay only rental income through the separate taxation method, so the annual income related to housing rental should not exceed 20 million won.
■ Partial amendments to the [Housing Lease Protection Act]
[1] Article 292, Paragraph 3 of the Civil Execution Act shall be applied to the leasehold registration order so that the leasehold registration order can be executed even before the leasehold registration order is delivered to the lessor (Article 3-3, Paragraph 3).
[2] When concluding a lease agreement, the lessor shall present the lessee with the information such as the date of granting the fixed date of the leased house, rent and deposit, and a tax payment certificate, or obtain consent to the provision of lease information by the fixed date granting agency and consent to inspection of unpaid taxes (new Article 3-7).
What is Sangsaeng Rental Housing?
If a first generation person enters into a lease agreement for a house in the regulated area between December 20, 2021 and December 31, 2024 (meeting certain requirements → lease for 2 years or more, etc.) and does not own another house (if owning a house other than the rental house, after disposing of all other houses)
If the rental house and the owned house meet the temporary two-home requirement, and the rental house is disposed of, even if the house is located in a regulated area, the one-household-one-home tax exemption can be applied as long as it is owned for more than two years.
■ If you temporarily own two houses due to moving
Temporary second home tax exemption requirements → 1 year after acquisition
If a household that owned one house (previous house) temporarily owns two houses by purchasing a new house more than one year after purchasing the previous house, the previous house is exempt from tax if sold within three years from the date of purchase of the new house.
However, the previous home ownership period must be at least 2 years.
■ Tax exemptions for those who own inherited houses and general houses
Transfer of general housing → Tax exemption if the requirement of one house per household is met
If a household that owns one house in Korea, one inherited from the deceased who was a separate household at the time of commencement of inheritance, and one general house (only applicable to the house owned at the time of commencement of inheritance) transfers the general house, it is considered as owning one house in Korea and can be exempted from taxation if the holding period is 2 years or more (2 years of residence in the area subject to adjustment).
[Article 155, Paragraph 2 of the Income Tax Act]
▶ Inherited houses subject to special provisions in cases where the deceased has two or more houses
If the deceased owned two or more houses at the time of commencement of inheritance, the special inheritance housing exception applies only to the house that the deceased owned for the longest period.
[Revised Tax Law] Exclusion of Tax Exemption Exceptions for Pre-Gifted Housing
(Article 155, Paragraph 2, Article 156-2, Paragraphs 6 and 7 of the Enforcement Decree of the Income Tax Act)
A house received as a gift from the deceased within two years from the date of commencement of inheritance is not considered a 'general house' and is excluded from tax exemption.
▶If the inherited house is jointly owned
In the case of a person who owns a jointly inherited house and a general house, when applying the special provision of one house per household, when transferring a house other than the jointly inherited house, the minority shareholder, excluding the person with the largest inheritance share, shall not regard the jointly inherited house as the house of the resident in question.
However, if there are two or more persons with the largest share of inheritance, the person who falls under each of the following items in the order listed below among those two or more persons is deemed to own the jointly inherited house.
[Article 155, Paragraph 2, Section 3 of the Income Tax Act]
1.
Person residing in the house in question
2.
oldest
▶ Special tax exemption for one house per household in cases where a general house acquired after inheriting a rural house located in a town or village outside the metropolitan area where the deceased lived for more than 5 years is transferred.
If the inherited house is a rural house located in a township (excluding areas within urban areas) or a township outside the metropolitan area, and the inheritor has lived in the rural house for more than 5 years after acquisition, and then acquires and transfers a general house, the tax exemption of one house per household may be applied.
(Article 155, Paragraph 7 of the Enforcement Decree of the Income Tax Act)
▶Tax exemption for inherited houses and temporary second homes
When a household that owns an inherited house and another house (general house) at the time of commencement of inheritance acquires another house more than one year after acquiring the general house and transfers the general house that satisfies the non-tax requirements within three years from the date of acquisition, the special provision for one house per household applies.
A house inherited from a member of the same generation → Taxed as a second home when transferring an inherited house or general house
A house inherited from a member of the same generation cannot be considered an inherited house and therefore is not subject to the tax exemption provisions.
However, if two houses are owned due to combining generations for the purpose of cohabitation and support, the general house is exempted from taxation as a special case of one house per generation.
(Transfer, Written-2015-Real Estate-0803, June 22, 2015)
If the inherited house is transferred first among the inherited house and the general house → capital gains tax is levied.
If you own a regular house and then transfer the inherited house first, you are considered a second-home owner and are subject to capital gains tax.
■ Comprehensive income of pension income, etc.
Public pension (national pension, civil servant pension, military pension, teacher pension, etc.)
① Tax is levied only on the amount of pension received after 2002, and if there is other comprehensive income subject to combined taxation, such as business income or earned income, it must be reported by combining it with the comprehensive income.
▶ Taxable conversion amount of public pension
Total receipt amount × (2002.
1. 1.
(Number of months of payment since then / Total number of months of payment)
▶ Withholding of pension income tax on public pension income
After withholding tax at source every month according to the simplified pension income tax table (withholding tax only when monthly pension amount exceeds 640,000 won), year-end tax settlement is made in January of the following year for the total annual pension income, similar to year-end tax settlement for earned income.
[Pension payment amount - Pension income deduction amount - Personal deduction - Standard tax deduction] × Basic tax rate (6% for up to KRW 12 million per year, 15% for over KRW 12 million and up to KRW 46 million) - Prepaid tax amount (Total amount of tax withheld each month) = Additional collection or refund
♣ If you have public pension income, such as national pension, and earned or business income, you must combine them and file a comprehensive income tax return.
▶ If you only have rental income and public pension income such as national pension
If your annual rental income is less than 20 million won and you only have public pension income such as the national pension, and you report the rental income as separate taxation, you do not need to report the comprehensive income tax by combining the national pension and rental income.
▶ Private pension (financial institution pension, etc.)
In the case of private pensions (insurance company, financial institution pension, etc.), if the taxable pension income is less than 12 million won per year, it is not included in the comprehensive income. However, if it exceeds 12 million won per year, it must be included in the comprehensive income.
(Article 14, Paragraph 3, Subparagraph 9 of the Income Tax Act)
▶ Pension income (Article 20-3 of the Income Tax Act) → The taxable pension income amount can be confirmed at the pension management institution.
1.
Pension account deposit amount that has been deducted from earned income, business income, etc. for pension deposit amount (Article 59-3, Paragraph 1 of the Income Tax Act)
2.
Increased amount based on pension account performance
■ Combined housing ownership and comprehensive income tax reporting and payment
□ If the couple owns only one house
If a couple owns only one house, they are not taxed regardless of the rental income.
However, if you rent out an expensive house with a standard market price exceeding KRW 900 million (KRW 1.2 billion after 2023, including multi-family housing) as of the end of the tax period, you must report and pay comprehensive income tax or include it in your comprehensive income.
□ Cases where taxation is imposed even if a married couple jointly owns only one house
1.
A house whose standard market price as of the end of the tax period exceeds KRW 900 million (KRW 1.2 billion after 2023)
2.
Houses located overseas
□ If a couple owns two houses combined
If you only have a rental deposit, you are not subject to comprehensive income tax reporting, but if you have monthly rental income, you must report and pay comprehensive income tax.
□ If a couple owns three or more houses combined
If you own three or more houses and have rental income, you must report and pay comprehensive income tax.
However, if a house with a residential area of 40 square meters or less and a standard period of 200 million won or less is rented out by receiving only a rental deposit, it is excluded from the number of houses, and the deemed rent is not calculated for the rental deposit.
◈ Combined number of houses for a couple and separate comprehensive income tax returns
In the case of a married couple, the number of houses is calculated by adding them together, but rental income is calculated separately, so the husband and spouse must each report and pay comprehensive income tax on their rental income.
◈ Tax exemption for houses owned by each spouse, etc.
? Number of houses: Combined number of couples
? Rental Income Calculation and Comprehensive Income Tax Reporting and Payment: Separate for Spouses
■ Comprehensive income tax reporting method by housing rental business size
□ If the total rental income for the current year is less than 20 million won
When filing a comprehensive income tax return, you can choose between separate taxation or comprehensive taxation. If you choose separate taxation and file a return, you will only calculate and pay taxes separately for housing rental income, and it will not be combined with other income. Therefore, for those with a high tax burden due to a large amount of earned income or other business income, the tax saving effect is significant.
Therefore, in the case of high-income earners, the best way to reduce taxes is to report and pay only rental income through the separate taxation method, so the annual income related to housing rental should not exceed 20 million won.
■ Partial amendments to the [Housing Lease Protection Act]
[1] Article 292, Paragraph 3 of the Civil Execution Act shall be applied to the leasehold registration order so that the leasehold registration order can be executed even before the leasehold registration order is delivered to the lessor (Article 3-3, Paragraph 3).
[2] When concluding a lease agreement, the lessor shall present the lessee with the information such as the date of granting the fixed date of the leased house, rent and deposit, and a tax payment certificate, or obtain consent to the provision of lease information by the fixed date granting agency and consent to inspection of unpaid taxes (new Article 3-7).
--- From the text
Publisher's Review
[1] What should I do about the tax laws that are revised from time to time?
If there are any tax laws revised after the publication date of the book, they will be included in a separate document within the book.
[2] All content that could not be included in this book due to space limitations is provided through the Management Information Service website.
[3] This book is a book that the author has written with great care while providing accounting and tax consulting (Easy to Use, Samil Infomine) for over 20 years to cover the essential information that representatives and accounting practitioners must know and to prevent tax mistakes that can lead to tax problems.
If there are any tax laws revised after the publication date of the book, they will be included in a separate document within the book.
[2] All content that could not be included in this book due to space limitations is provided through the Management Information Service website.
[3] This book is a book that the author has written with great care while providing accounting and tax consulting (Easy to Use, Samil Infomine) for over 20 years to cover the essential information that representatives and accounting practitioners must know and to prevent tax mistakes that can lead to tax problems.
GOODS SPECIFICS
- Date of issue: September 22, 2025
- Page count, weight, size: 370 pages | 153*224*30mm
- ISBN13: 9791194479277
- ISBN10: 1194479278
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