Korea's temporary two-home exemption from capital gains tax requires three numbers to line up at once. You must buy the new home more than one year after acquiring the previous one, hold the previous home for at least two years, and sell it within three years of acquiring the new one. Miss any one of them and a gain that would have been exempt up to 1.2 billion won becomes fully taxable.
The number most often missed is the first. The three-year disposal deadline is widely known, but the entry condition — one full year after acquiring the previous home — has to be checked when signing the contract for the new home. There is no way to fix it afterward.
What Each of the Three Numbers Measures
The National Tax Service's published requirements come down to three points. First, the new home must be acquired more than one year after the acquisition date of the previous home, with the first day excluded from the count. Second, the previous home must be held for at least two years; if it was located in a jomjeong daesang jiyeok (regulated speculation zone) at the time of acquisition, an additional two years of actual residence applies. Third, the previous home must be sold within three years of the new home's acquisition date. The exemption caps out at a transfer price of 1.2 billion won.
The three-year deadline used to be two. According to an announcement from the Ministry of the Interior and Safety, effective 12 January 2023 the disposal deadline was extended to three years from the new home's acquisition date across capital gains tax, acquisition tax, and the comprehensive real estate holding tax. For capital gains tax it applies to previous homes transferred on or after that date.
These are AND conditions with an order. One year is the entrance, two years is eligibility, three years is the exit. Fail the entrance and there is no need to calculate the other two.
Exactly What Date Is My Deadline?
Plugging in dates makes the judgment concrete. Below, the previous home's acquisition date is fixed at 10 March 2023, and only the new home's acquisition date changes.
| New home acquisition date | Elapsed since old home purchase | One-year requirement | Deadline to sell the old home |
|---|---|---|---|
| 20 Feb 2024 | 11 months, 10 days | Not met | N/A — exemption unavailable |
| 11 Mar 2024 | 1 year, 1 day | Met | 11 Mar 2027 |
| 20 Jun 2025 | 2 years, 3 months | Met | 20 Jun 2028 |
| 28 Aug 2026 | 3 years, 5 months | Met | 28 Aug 2029 |
Nineteen days separate the first row from the second, and those nineteen days erase the exemption entirely. Because the first day is excluded, a home acquired on 10 March 2023 puts the safe zone at 11 March 2024 onward — for a borderline date, pushing the balance payment back a few days changes the outcome.
The same logic applies at the other end. Scheduling the closing for the very last day of the disposal window means a buyer-side delay of a few days wipes out the exemption. Because deadline counting can be disputed depending on how acquisition is defined, practitioners aim a month or two ahead of the formal limit.
What Missing the Deadline Costs
A case reported by Herald Economy shows the scale. On a home with a 600 million won gain, a long-term holding deduction of 16% (96 million won) left a tax base of roughly 501.5 million won, producing capital gains tax of about 192 million won including local income tax — none of which would have been owed had the requirements been met.
It did not stop there. The same case triggered 60.36 million won in additional acquisition tax plus 1.11 million won in local education tax, more than 61 million won on the acquisition side alone. Combined with the capital gains bill, the total lands in the 250 million won range. That is a steep price for one missed condition.
There is another clock running. The heavier capital gains rates on multiple-home owners are suspended until 9 May 2026; once the suspension ends, two-home owners face the base rate plus 20 percentage points. If your disposal deadline falls after that date, you are watching two calendars at once.
Three years is only the exit deadline. The door to the exemption opens on the first anniversary of buying the previous home.
The 'Acquisition Date' Differs by Tax
The three-year window is uniform across taxes, but the day the count starts is not. The gap shows up most clearly when the new home is a bunyangkwon (pre-sale housing right).
| Tax | Disposal deadline | How the new home's acquisition date is set |
|---|---|---|
| Capital gains tax | 3 years from acquisition | For pre-sale rights acquired on or after 1 Jan 2021, the date the right was acquired |
| Acquisition tax | 3 years from acquisition | Balance settlement date; resold pre-sale rights acquired after 10 Jul 2020 face heavier rates |
| Comprehensive real estate tax | 3 years from acquisition | Ownership assessed as of the 1 June assessment date each year |
A pre-sale right adds a layer. For capital gains tax, the day the right was acquired counts as the new home's acquisition date, so with two or three years of construction ahead, the disposal deadline can arrive before the building is even finished. An exception exists for this: if the new home is for actual residence, the exemption still applies when every member of the household registers their residence within three years of completion and lives there for at least one year. Both conditions — full household registration and one year of residence — are required.
Acquisition tax runs off the balance settlement date, so its clock is out of step with the capital gains clock. One transaction, two different starting dates, which is how an acquisition tax reassessment and a capital gains assessment can arrive separately. The rate structure for acquisition tax itself is covered in how acquisition tax is calculated, and if an officetel is in the mix, even the count of homes differs by tax (see whether an officetel counts as a home).
What to Check
- Using the property register and sale contracts, confirm more than one year separates the two acquisition dates — the first day is excluded from the count
- Check whether the previous home was in a regulated zone at acquisition — if so, two years of residence is required on top of two years of holding
- Check whether the transfer price of the previous home exceeds 1.2 billion won — the excess is not exempt
- If the new home is a pre-sale right, record the capital gains start date (the right's acquisition date) and the acquisition tax start date (balance settlement) separately
- Do not schedule the closing on the deadline itself — a delay of a few days on the buyer's side reverses the outcome
- Compare your disposal deadline against the scheduled end of the multiple-home surcharge suspension on 9 May 2026, and note which comes first
- If you plan to rely on the pre-sale residence exception, confirm in advance when every household member can register and whether a full year of residence is feasible