Buying property in South Korea as a foreigner

• 1 percent where the acquisition value is KRW 600,000,000 or less.
• 3 percent where it is above KRW 900,000,000.
• Between KRW 600,000,000 and KRW 900,000,000 a rate is calculated by a formula in the Local Tax Act.
• The tax is filed and paid within 60 days of acquiring.

• The Local Tax Act adds 200 percent of a 2 percent base rate, which is 4 percentage points on top of the 4 percent standard rate, to a purchase that makes the second home of a household in a designated adjusted area or the third home elsewhere.
• It adds 400 percent of the base rate, which is 8 percentage points, for a company buyer, for a third home in an adjusted area and for a fourth home elsewhere.
• The rate for a household with a foreign owner is not separately stated in the Act text read.

4 percent of the acquisition value for non farm property acquired by purchase or another cause not listed separately. 3 percent for farmland.

2.8 percent on inherited property other than farmland, 2.3 percent on inherited farmland, and 3.5 percent on other gratuitous acquisition such as a gift.

• Property tax is assessed on the owner on 1 June each year.
• Tax on a home is payable half between 16 and 31 July and half between 16 and 30 September.
• Tax on land is payable between 16 and 30 September and on buildings between 16 and 31 July.

The tax is charged on a person who is liable for home property tax on the 1 June assessment date, on the total official value of homes above a deduction of KRW 900,000,000, or KRW 1,200,000,000 for a household whose single home qualifies.

For a non resident individual or a foreign company with no business place and no domestic source income, the place of tax is the location of the property, or of the property with the highest official value where there are several.

• Rent and other income from real estate in South Korea is domestic source real estate income of a non resident.
• A non resident with such income is taxed on the aggregate of domestic source income under the same personal income tax method as a resident, with some resident only deductions not available.
• The rate bands were not read.

The assessment, filing and payment rules for residents apply to the non resident, and tax withheld at source is credited against the final tax.

• A gain from selling land or buildings in South Korea is domestic source real estate transfer income of a non resident, and it is taxed in the same classified way as a resident gain.
• Under the holding period rates in the Income Tax Act, a home held under 1 year is taxed at 70 percent and a home held from 1 to under 2 years at 60 percent, and other real estate at 50 percent and 40 percent for the same periods.
• Longer holding periods follow the general progressive rate table, which was not read.

• A payer other than an individual who pays a non resident for Korean real estate withholds 10 percent of the amount paid, or the lower of 10 percent of the payment and 20 percent of the gain where the acquisition cost and selling costs are proven.
• No withholding applies where the non resident shows the tax was paid in advance or that no tax is due.
• Whether an individual buyer must withhold was not confirmed beyond the exclusion of individual payers in the text.

The exemption for one home held by a household does not apply to non residents of a kind set by decree, which was not read. The exemption for a household home covers a home with a sale price of up to KRW 1,200,000,000.

• Inheritance tax reaches all property of a resident who dies, and only South Korean property where the person who dies is a non resident.
• Gift tax reaches only South Korean property where the recipient is a non resident.
• Both taxes use the same bands: 10 percent up to KRW 100,000,000, then 20 percent, 30 percent, 40 percent and 50 percent above KRW 3,000,000,000.