Korea's Property Holding Tax: The 1.2bn Won Deduction and 60% Ratio

A one-home household in Korea owes no jongbuse — the comprehensive real estate holding tax — as long as the government-assessed value of the home stays under 1.2 billion won. Above that line, the excess is not taxed in full either. Under the National Tax Service calculation flow, the post-deduction amount is multiplied by a fair market value ratio of 60% to form the tax base. So a single home assessed at 2 billion won yields a tax base of 480 million won and a computed tax of 2.76 million won — about 1.4% of the assessed value.

The assessment date is June 1. Whoever holds registered title that day owes the year's holding tax. Bills go out in November and payment runs from December 1 to 15. Between those points sits a two-week exclusion filing window in September; anything not filtered out there flows straight into the December bill.

Four steps, start to finish

The order is fixed, which means you can run it by hand. First, sum the assessed values of all homes nationwide — per person, not per household, which differs from the local property tax. Second, subtract the basic deduction: 900 million won generally, 1.2 billion won for a one-home household. Third, multiply the remainder by the 60% fair market value ratio to get the tax base. Fourth, apply the bracket rate and subtract the progressive deduction.

The rate schedule forks by how many homes you hold. The NTS publishes both.

Up to a tax base of 1.2 billion won the two schedules are identical. They diverge only above that. Working backward through the 60% ratio, a 1.2 billion won tax base corresponds to 2 billion won of post-deduction assessed value — reachable at 3.2 billion won of assessed value for a one-home household, or 2.9 billion won combined for a multi-home owner.

What each assessed value actually costs

Holding the assessed value constant and changing only the deduction shows what the 1.2 billion won threshold is worth. Figures below apply the two-homes-or-fewer schedule, before the property tax credit and before the age and holding-period credits.

The 300 million won deduction gap, multiplied by 60%, fixes the tax base difference at 180 million won across every row. Yet the tax gap widens from 900,000 to nearly 2 million won, because the two tax bases sit in different rate brackets. The higher the assessed value, the more the one-home determination is worth.

These are not final billed amounts. From here the system subtracts local property tax already paid on the overlapping portion and then caps anything above 150% of the prior year's combined property tax and holding tax. Reading it alongside how the July and September property tax installments are computed gives the real burden. Amounts over 2.5 million won can be split over six months.

The tax attaches not to the assessed value but to 60% of what remains after the deduction. On a tax bill, the first number to check is the tax base, not the rate.

Age 70 with 15 years held cuts 80% off

One-home households get one more layer of relief: an age-based credit and a holding-period credit, added together and capped at 80%.

Applied to the 2.76 million won computed on a 2 billion won home, the outcomes separate sharply.

Even where the arithmetic gives 90%, the applied figure stops at 80%. Same house, same assessed value, and the bill moves from 2.76 million won to 552,000 won on the owner's age and tenure alone. Couples holding title jointly may choose between two deductions of 900 million won each and electing the one-home special treatment for the 1.2 billion won deduction plus these credits; long tenure and qualifying age push the calculation toward the election. The same 1.2 billion won line also serves as the threshold for joining the state reverse mortgage program.

September 16 to 30: the exclusion filing

Not every home you own enters the tax base. The NTS accepts exclusion and special-treatment filings from September 16 to September 30 each year, and homes filed there are left out of the housing tax base entirely. The same window handles registered rental housing, employer-provided housing, land held for new construction, the joint-title one-home election, and religious organization treatment.

Requirements differ by rental housing type. The NTS-published thresholds:

Construction rentals carry two more conditions: floor area of 149 square meters or less, and annual rent increases capped at 5%. Once filed, no annual refiling is needed unless circumstances change. The catch is that failing the requirements later triggers clawback of the exempted tax plus interest-equivalent charges. The real decision is not whether to file but whether the five-year rental term and the rent cap can be honored to the end.

What may change from 2027

A reform bill is on the table, not yet law, and its direction is public. The tax reform package announced in August 2026 would raise the one-home deduction to 1.4 billion won where the owner actually resides in the property, while cutting it to 900 million won for a non-resident owner of a single home. The fair market value ratio would rise from today's 60% to 70% in 2027, reaching 80% by 2028 for owners of three or more homes or of homes in regulated zones. The burden cap would move from 150% to 200%, and the age and holding credits would be consolidated into whichever single rate is higher, subject to an absolute cap.

The bill still has to clear the National Assembly, and it would first apply to the June 1, 2027 assessment billed that December. This year's calculation is unaffected. But if the design keying the deduction to actual residence survives, owning one home you do not live in would drop the deduction from 1.2 billion to 900 million won. Anyone renting out a single home while living elsewhere has a concrete reason to track the bill.

What to check

June 1 has passed, so this year's liability is already fixed. What remains is reconciling the inputs.

• Total assessed value in your own name — the sum is per individual, not per household. Pull each home's assessed value from the government valuation portal and add them
• One-home household status — if any household member owns another home, the 1.2 billion won deduction does not apply. Separate rules exclude inherited fractional shares and low-value regional homes from the count
• Joint-title election math — calculate both paths: two deductions of 900 million won each versus the one-home election with a 1.2 billion deduction plus age and tenure credits
• Whether an exclusion filing applies — September 16 to 30. If you hold registered rental housing, employer housing, or construction land, check it against the requirement table
• Whether the burden cap bites — anything above 150% of last year's combined property and holding tax is cut. The bill shows pre-cap and post-cap figures
• Installment eligibility — over 2.5 million won can be split across six months. Missing the December 15 deadline adds late-payment penalties

Sources

• Comprehensive real estate holding tax calculation flow (National Tax Service)
• Guide to exclusion and special-treatment filings (National Tax Service)
• 2026 comprehensive real estate holding tax: thresholds, calculation, payment (Toss Bank)
• 2026 tax reform proposals II: asset taxation (Shin & Kim)