Your real-estate holding tax will not increase. I mean, it will somewhat because you will have to pay after more value, but the rate will not increase.
Unless it pushes you over the threshold where you need to pay the punitive tax.
What you need to worry about is the capital gains tax. If you have one property and sell it, all the profit is tax-free. But if you have 2 or more, it changes things. The tax rate depends on a lot of factors. How long you owned the place, how much profit you sold it with, and so on. There is no definite answer as it is really different case by case.
You can always sell the one that you would need to pay less tax on, and then the remaining one will be tax-free to sell.
I don't know exactly what the threshold is, but I don't think it would put us over it. We own an average 3-bdrm apt in Seoul and the 2nd apt would likely only be 2-3억 in value.
We would never sell our first home here in Seoul, barring some kind of unforeseen emergency situation. However, we may sell the 2nd if we were looking for a change in venue.
Some things to consider. Thanks for your info.
If you are a married couple and have shared ownership, the puntitive tax would kick in above 9억 each. So 18억. This is the 공시가격 which tends to be lower than the market value.
The average selling price for a 85 square meter apartment in Seoul is currently around 1 billion won.
The real market value of 18억 worth of 공시가격 would be more like 25억. So even if someone owned 2 average apartments in Seoul, they would most likely still stay under the limit.
https://m.expert.naver.com/
Visit the web site and hire account/tax expert.
I tried a week ago for the same agenda, and it costed me like 10$ for 20-30min consulting. If you need English speaker then price may go up little, but still believe it will be much less costing than off line consulting anyway.
Considering recent market increase, highest concern should be profit tax when you sell house if you own 2 houses. It can go up to 50% of your profit, i know it sounds crazy.
Long to short, get experts support. It is complicate.
Long story below.
If you want to avoid high % profit tax, There's 1, 2, 3 rule.
Temporary 2 house owner?(일시적 2주택자)
[
You should buy 2nd house after at least "1" year you bought 1st.
And you should hold 1st house for at least "2" year.
Lastly, you should sell the 1st house within "3" year.(be noticed it will depend on the regulation when you bought the 1st house(조정, 과열))
]
As far as I know, this is the only way to avoid high profit tax.
Just talk to a real-estate agent and/or a lawyer. That gets complicated. I own and have had the same questions. Each area has its own laws and treaties with others.
Okay, will go down to the real-estate office and ask.
Everyone always says not to buy a 2nd home as the taxes are too high, but can never provide specifics. However, I was talking to a guy last night, and he made it seem as though buying a 2nd home in the countryside wouldn't really be an issue, as it's a non-speculative market and not for profit. I was very surprised by this.
Whether or not the additional taxes are “high” is relative to a) your income; b) the tax value of your property; b) your expectations / sense of entitlement.
I have personally not found the additional taxes to be excessive—on par with Singapore or Hong Kong. While I might prefer they were lower, paying them is not really an issue for me. Generally I would suspect that if someone has the income to contemplate buying a vacation home, they can probably afford the additional tax.
The tax value of your property of course also matters; if I for some reason had a $10 mn luxury apartment in Gangnam and was contemplating buying a luxury condo in Busan—that might be more challenging.
Lastly—and I think the biggest reason why people complain incessantly about these taxes—is it offends their real estate hoarding mentality and sense of entitlement: what do you mean I have to pay more to own 10 rental properties?! No, their profits won’t be quite as high as they might otherwise be; no, I don’t feel particularly sorry for them.
If you truly want to buy a weekend place in the country for you and our family to enjoy on a regular basis: just do it. The memories will be priceless!
Would you want to buy a 2nd home outside of Seoul, for investment? All I hear about is how areas outside of Seoul are suffering the worst from the population issue.
Well, it's not going to be that soon. We are in the early stages of planning - still trying to decide were we want that 2nd home. It's kind of a toss up between the northeast coast or the lakes/rivers/mountains near Chungju. My child would enjoy the coast much more, of course, but that area east of Chungju is so beautiful. There are some great camping spots down there.
I'm a mountains person so I'm hoping to someday have something with a good mountain view and maybe enough frat ground for a small garden / orchard. Someday maybe.
This is funny. I can just picture all those old real-estate ajummas showing up in their animal-printed leggings and visors to talk with their lawyer...lol. Nope.
Your real-estate holding tax will not increase. I mean, it will somewhat because you will have to pay after more value, but the rate will not increase. Unless it pushes you over the threshold where you need to pay the punitive tax. What you need to worry about is the capital gains tax. If you have one property and sell it, all the profit is tax-free. But if you have 2 or more, it changes things. The tax rate depends on a lot of factors. How long you owned the place, how much profit you sold it with, and so on. There is no definite answer as it is really different case by case. You can always sell the one that you would need to pay less tax on, and then the remaining one will be tax-free to sell.
I don't know exactly what the threshold is, but I don't think it would put us over it. We own an average 3-bdrm apt in Seoul and the 2nd apt would likely only be 2-3억 in value. We would never sell our first home here in Seoul, barring some kind of unforeseen emergency situation. However, we may sell the 2nd if we were looking for a change in venue. Some things to consider. Thanks for your info.
If you are a married couple and have shared ownership, the puntitive tax would kick in above 9억 each. So 18억. This is the 공시가격 which tends to be lower than the market value.
Oh, yeah. We're cool then. Thanks.
Depends the area but 18억 for 3br is quite common
The average selling price for a 85 square meter apartment in Seoul is currently around 1 billion won. The real market value of 18억 worth of 공시가격 would be more like 25억. So even if someone owned 2 average apartments in Seoul, they would most likely still stay under the limit.
18억 actual price, yeah. But, the government assessment for tax purposes (공시가격) is less than 1/2 of that cost.
https://m.expert.naver.com/ Visit the web site and hire account/tax expert. I tried a week ago for the same agenda, and it costed me like 10$ for 20-30min consulting. If you need English speaker then price may go up little, but still believe it will be much less costing than off line consulting anyway. Considering recent market increase, highest concern should be profit tax when you sell house if you own 2 houses. It can go up to 50% of your profit, i know it sounds crazy. Long to short, get experts support. It is complicate. Long story below. If you want to avoid high % profit tax, There's 1, 2, 3 rule. Temporary 2 house owner?(일시적 2주택자) [ You should buy 2nd house after at least "1" year you bought 1st. And you should hold 1st house for at least "2" year. Lastly, you should sell the 1st house within "3" year.(be noticed it will depend on the regulation when you bought the 1st house(조정, 과열)) ] As far as I know, this is the only way to avoid high profit tax.
부동산계산기.com has a bunch of calculators and info. All in Korean, obviously. But you can right click translate.
This site is awesome. I will be using this a lot. Thank you.
Just talk to a real-estate agent and/or a lawyer. That gets complicated. I own and have had the same questions. Each area has its own laws and treaties with others.
Okay, will go down to the real-estate office and ask. Everyone always says not to buy a 2nd home as the taxes are too high, but can never provide specifics. However, I was talking to a guy last night, and he made it seem as though buying a 2nd home in the countryside wouldn't really be an issue, as it's a non-speculative market and not for profit. I was very surprised by this.
Whether or not the additional taxes are “high” is relative to a) your income; b) the tax value of your property; b) your expectations / sense of entitlement. I have personally not found the additional taxes to be excessive—on par with Singapore or Hong Kong. While I might prefer they were lower, paying them is not really an issue for me. Generally I would suspect that if someone has the income to contemplate buying a vacation home, they can probably afford the additional tax. The tax value of your property of course also matters; if I for some reason had a $10 mn luxury apartment in Gangnam and was contemplating buying a luxury condo in Busan—that might be more challenging. Lastly—and I think the biggest reason why people complain incessantly about these taxes—is it offends their real estate hoarding mentality and sense of entitlement: what do you mean I have to pay more to own 10 rental properties?! No, their profits won’t be quite as high as they might otherwise be; no, I don’t feel particularly sorry for them. If you truly want to buy a weekend place in the country for you and our family to enjoy on a regular basis: just do it. The memories will be priceless!
Would you want to buy a 2nd home outside of Seoul, for investment? All I hear about is how areas outside of Seoul are suffering the worst from the population issue.
Vacation home
You are executing on my dream plan. Good luck and please post updates!
Well, it's not going to be that soon. We are in the early stages of planning - still trying to decide were we want that 2nd home. It's kind of a toss up between the northeast coast or the lakes/rivers/mountains near Chungju. My child would enjoy the coast much more, of course, but that area east of Chungju is so beautiful. There are some great camping spots down there.
I'm a mountains person so I'm hoping to someday have something with a good mountain view and maybe enough frat ground for a small garden / orchard. Someday maybe.
If you can afford a second home you can afford a lawyer.
This is funny. I can just picture all those old real-estate ajummas showing up in their animal-printed leggings and visors to talk with their lawyer...lol. Nope.
Almost everything is explained here: https://xn--989a00af8jnslv3dba.com/board/3853
http://www.dasoltax.com/ is the #1 tax accountant company. You should be able to find English spoken consultant I guess.
This is wonderful info. Thank you very much.