Replacement-property acquisition tax after Korean expropriation
When a public project acquires your land or building through expropriation or an agreed sale, Article 73 of the Korean Restriction of Special Local Taxation Act may provide acquisition-tax relief for replacement property.
Receiving compensation alone does not make every replacement purchase exempt.
You must check the replacement contract or building-permit date, the legally operative acquisition date, the location, the former owner’s residence or business history, and any value exceeding the available compensation.
This calculator separates those checks and estimates principal acquisition tax under a conditional exemption scenario.
It does not calculate capital-gains-tax relief or deferral for replacement land, and it cannot approve a local tax exemption or determine a final assessment.
If compensation or replacement purchases involve multiple transactions, establish the remaining usable compensation before comparing amounts.
Korean rules, verified on October 22, 2026
The automatic preliminary-review window for the verified legislation is a legally operative acquisition date from September 18 through December 31, 2026.
Earlier acquisitions and acquisitions in 2027 or later remain pending until the legislation applicable on that date is checked.
A displayed future deadline is not a promise that the same exemption will apply in that future year.
Four separate eligibility checks
Project and owner
Confirm that the project and the compensated owner’s replacement acquisition fall within Article 73(1).
Absentee-owner restrictions and property listed in Local Tax Act Article 13(5) require separate checks.
Contract and acquisition
Check the replacement contract or building permit against the relevant project notice or eligible earlier sale contract.
An ordinary purchase contract signed before the deadline does not, by itself, complete acquisition in time.
Replacement location
Confirm the administrative relationship between the old and new properties and any relevant designated-area restriction.
A qualifying replacement location does not establish the owner’s residence qualification.
Amount and tax rate
Compare the legally determined replacement value with the verified compensation balance available for relief.
The estimate requires one confirmed principal tax rate applicable to the whole transaction.
Do not confuse contract, compensation, and acquisition dates
- Opening of the eligible period: Check the project-recognition notice and any eligible sale contract for the old property signed before that notice.
Compare the replacement contract or building permit with the earlier legally effective starting event.
- Deadline reference date: For cash compensation, the ordinary reference is the date of the final compensation payment.
Where the project implementer’s circumstances prevent acquisition, verify the date acquisition becomes possible.
For land compensation, the relevant date is when the specific compensation land can be acquired, not when an arbitrary alternative plot can be purchased.
Land-compensation mode remains pending for individual review of that land and its availability date.
For compensation bonds, check the end of the redemption period.
- Acquisition event: Ordinarily, compare the legally operative acquisition date with the deadline.
For the statutory exception involving a presale of housing under construction, use the presale contract date rather than later completion or move-in.
Acquisition before the final payment is not automatically disqualified
The final payment date determines the outside deadline; it is not necessarily the opening date of the eligible period.
An acquisition after the project notice or an eligible pre-notice agreed-sale contract may occur before final receipt.
Operating Rule Act 73-1 explains the starting period.
Review the actual contract and acquisition facts rather than marking a transaction ineligible, or necessarily pending, solely because it preceded final payment.
Mixed compensation, complex installment schedules, and multiple replacement acquisitions are outside automatic review.
Do not select a convenient cash-payment date: take the full compensation statement and the implementer’s explanation to the relevant local tax office.
One year normally; two years only for Article 6(1) farmland
The ordinary acquisition period is one year from the legally verified reference date.
The two-year treatment applies when the replacement farmland meets Article 6(1) of the Restriction of Special Local Taxation Act.
The old property being farmland does not, on its own, establish a two-year period.
If the replacement farmland’s qualification is unknown, compare the one-year and two-year planning dates without treating either as a confirmed deadline.
Anniversary examples and the last day
A reference date of October 1, 2025 gives a nominal one-year deadline of October 1, 2026 and a nominal qualifying-farmland deadline of October 1, 2027.
The law for an actual 2027 acquisition must still be rechecked.
For February 29, 2024, the calculator adjusts a missing anniversary to February 28, 2025 after one year and February 28, 2026 after two years.
These are nominal planning dates, not deadlines automatically extended for weekends, holidays, or individual relief.
The date comparison includes the nominal final day and identifies the following day as beyond that planning date.
Exceeding the nominal date leaves the verdict pending, not definitively unmet, until statutory period counting and relevant exceptions are checked.
Confirm the starting time and legally operative acquisition event with the authority rather than choosing freely among payment, registration, or approval dates.
Location rules and the separate farmland location exception
- Check whether the replacement is in the same si/do as the old property.
- Check whether it is in a si/gun/gu adjoining the old property’s si/gun/gu.
- For an adjoining si/do, check the exclusion for an area designated under Income Tax Act Article 104-2.
- Replacement farmland may also qualify in other locations outside those routes when the location is not such a designated area.
The same-si/do and adjoining-si/gun/gu routes are distinct from the designated-area condition on the adjoining-si/do route.
An unknown designation does not automatically defeat every route, and the calculator does not infer adjacency from an address.
A designated area under Income Tax Act Article 104-2 is not simply a regulated housing zone.
The wider farmland location rule is separate from the two-year Article 6(1) timing rule.
The statutory location treatment for a qualifying self-cultivating farmer’s dwelling used for farming, with a value strictly below 50% of total compensation, requires separate authority review.
This tool does not automatically evaluate that exception; its absence from automatic processing does not mean such a dwelling is always geographically ineligible.
Absentee-owner status uses a narrower old-property locality
Registration somewhere in the same province is not enough.
Use the old-property sale-contract date if it preceded the notice, otherwise the project-recognition notice date.
Check continuous resident or business registration and actual residence or business activity for the preceding year within the applicable locality.
A registered address without the necessary real residence or business activity does not establish the condition.
Old property was farmland
Check its si/gun/gu, an adjoining si/gun/gu, or a location within a straight-line distance of 30 kilometers from that farmland.
Do not substitute road-travel distance for straight-line distance.
Old property was not farmland
Check its gu/si/eup/myeon or an adjoining gu/si/eup/myeon.
Do not import the broader replacement-property si/do location test into this owner-history test.
The calculator does not retrieve registration or address records.
Prepare both registration history and evidence of actual residence or business.
For inherited old property, rules allowing the decedent’s and heir’s relevant periods to be combined may matter.
Inheritance and period aggregation are not calculated automatically, so inheritance alone establishes neither qualification nor disqualification.
Enter usable compensation, corresponding value, and the whole-transaction rate
Available compensation balance C
Enter the amount verified as available for relief on this purchase, not necessarily the total compensation received.
Exclude compensation already used for another acquisition and amounts not eligible for this relief.
A verified zero balance differs from an unknown blank value.
Corresponding acquisition value P
Select the documented actual acquisition price or the corresponding tax-base method under Enforcement Decree Article 34(1).
Use evidence supporting that method; do not add or subtract transaction costs arbitrarily.
An unresolved valuation method leaves the tax conclusion pending.
Confirmed single principal rate r
Enter the principal acquisition-tax rate confirmed for the entire transaction, accounting for property type, total price, ownership circumstances, and applicable rules.
Do not determine a lower housing rate by treating only the compensation excess as the purchase price.
Mixed rates or unresolved surtax treatment require separate review.
Amounts must be finite whole won, with a maximum of KRW 1 trillion.
The rate input accepts more than 0% and no more than 20%; an accepted input is not confirmation that the law permits that rate for your purchase.
The 4% used below is a hypothetical single rate for arithmetic, not a universal rate for land or housing.
Conditional exemption and excess-value formulas
- Value corresponding to the exemption = min(P, C)
- Taxable excess value = max(0, P − C)
- Principal tax before relief = round(P × r ÷ 100)
- Conditional principal tax payable = round(max(0, P − C) × r ÷ 100)
- Conditional principal tax saved = principal tax before relief − conditional principal tax payable
These formulas assume the project, owner, contract, timing, location, valuation, and single-rate conditions are satisfied.
For a confirmed exclusion, compare with principal tax before relief.
An assumed or incomplete condition does not turn a conditional scenario into a final amount due.
Rounding to the nearest won is for budgeting and may differ from statutory assessment rounding.
No additional 15% minimum payment
Article 177-2 excludes Article 73 from the relevant restriction on full relief.
This calculation therefore does not add 15% of the exempt principal tax back as a minimum payment.
That does not establish that every ancillary tax or registration cost is zero: local education tax, special rural development tax, and registration expenses are outside the total shown.
Worked example: KRW 600 million value and KRW 500 million compensation
Assume P = KRW 600,000,000, C = KRW 500,000,000, and a hypothetical confirmed whole-transaction rate of 4%.
Also assume all nonfinancial eligibility conditions are satisfied.
Before relief
KRW 24 million
600 million × 4%
Tax on the excess
KRW 4 million
100 million × 4%
Conditional savings
KRW 20 million
24 million − 4 million
If the deadline or another essential condition is missed, the comparison becomes KRW 24 million of principal tax, KRW 20 million more than the conditional relief scenario.
If P equals C, conditional principal tax payable is zero; if C is zero, conditional savings are zero.
No 15% minimum is added, and ancillary taxes and fees remain separate.
Use confirmed, assumed, and unknown evidence separately
- Set the review date and gather compensation statements, project notices, sale and replacement contracts, and any building permit or presale contract.
Confirm which date is the acquisition event and which is the deadline reference.
- Enter the farmland timing and location exceptions independently.
Check absentee-owner status and Article 13(5) property restrictions, leaving genuinely unknown facts unknown.
- Enter usable compensation, the valuation method, and the confirmed single principal rate.
For timing, eligibility, and financial evidence bundles, record confirmed, assumed, or unknown status, a source memo, and an evidence date.
- Read the nominal deadline and reasons for each condition before reading the tax comparison.
Confirmed evidence needs a valid date no later than the review date and a source memo.
An assumption is not a verified fact, even when it produces a numerical scenario.
- Take the summary and outstanding questions to the local tax office responsible for the replacement property.
Confirm the exemption application, supporting documents, filing procedure, and separate statutory filing deadlines for the transaction.
Interpret the result status, not just the number
Ready for exemption-application review means the entered evidence supports further application review, not legal approval.
Unmet identifies a known exclusion or failed condition.
Exceeding the nominal planning deadline remains pending until the legal period and exceptions are checked; keep that status separate from a conditional scenario assuming the statutory deadline was actually missed.
Pending also identifies assumptions, unknowns, missing evidence, or matters outside automatic scope.
Keep the current-input tax review separate from the all-conditions-met scenario.
Frequently asked questions
Does old farmland automatically give me two years?
No.
The replacement acquisition must qualify under Article 6(1).
Old-property farmland status, the wider replacement-farmland location rule, and the two-year timing exception are separate questions.
Is an ordinary purchase contract before the deadline sufficient?
Normally, you must check the legally operative acquisition date rather than the contract alone.
The statutory exception for a presale of housing under construction uses the presale contract date, not later completion.
Is buying before final compensation automatically disallowed?
No.
Check the opening event, including the project notice or an eligible pre-notice agreed-sale contract.
Operating Rule Act 73-1 and the actual transaction documents matter; final receipt is not a universal starting date.
Is registration in the same province enough to avoid absentee-owner status?
No.
Check continuous registration plus actual residence or business during the preceding year in the narrower locality applicable to the old property.
This is independent of the replacement property’s location rule.
Does buying above the compensation amount make the entire value taxable?
Where the other requirements are met, the calculation compares the corresponding value with usable compensation and taxes the excess.
First confirm the transaction’s correct valuation and rate.
Do not determine a housing tax rate from the excess alone.
Are a 15% minimum or special rural development tax included?
Article 73 is an exception under Article 177-2, so no 15% minimum is added.
Special Rural Development Tax Act Enforcement Decree Article 4(7)5 is a separate source for the related non-taxation rule.
This tool totals principal acquisition tax only; confirm local education tax, special rural development tax, and other charges separately.
What if compensation mixes cash and bonds, or I buy two properties?
Mixed compensation and multiple replacement purchases are outside automatic review.
Confirm the reference date, allocation, and amounts already used with the authority.
Reusing the same compensation balance on each purchase would double count potential relief.
Can I rely on the displayed date if it is a holiday or falls in 2027?
No.
The displayed nominal deadline does not automatically include a holiday extension.
Confirm legal period counting and the acquisition event.
For 2027 or later, recheck the applicable legislation; a displayed future date does not guarantee future relief.
Official sources and rule maintenance
The following Korean primary materials were checked through the National Law Information OPEN API on October 22, 2026.
Live links can change, so compare the version effective on the actual acquisition date.
This calculator does not assume a court precedent.
- Restriction of Special Local Taxation Act, Article 73: contract, timing, location, and exclusions; effective June 2, 2026; MST 286607.
- Enforcement Decree, Article 34: excess-value calculation and absentee owners; effective September 18, 2026; MST 288917.
- Act Article 6(1) and Article 177-2(1)2: the farmland cross-reference and Article 73’s exception from the relief limitation.
- Operating Rules, Act 73-1: the start of the replacement-acquisition period; Ministry of the Interior and Safety Rule No. 249, effective July 1, 2023; DRF ID 2100000225764.
- Special Rural Development Tax Act Enforcement Decree, Article 4(7)5: related non-taxation provision; effective January 2, 2026; MST 280835.
- Local Tax Act, Article 13(5): excluded property categories; effective July 1, 2026; MST 282559.
Future maintenance must recheck Articles 73, 6(1), and 177-2 together with Enforcement Decree Article 34.
For an individual transaction, verify usable compensation, the valuation method, the whole-transaction principal rate, statutory dates, designated-area status, and actual residence or business evidence with the authority.
Prepare the dates and evidence before committing to a purchase
Check the replacement contract, legal acquisition event, location, and owner conditions before relying on a compensation-versus-price comparison.
Use conditional savings as a budgeting scenario, keep unknown facts visible, and take the source notes and documents to the responsible local tax office before treating relief as part of your purchase plan.