Buy a replacement home or choose jeonse?
During Korean reconstruction or redevelopment, a household may need somewhere to live while its original home is rebuilt.
Buying a temporary replacement home can look attractive when a capital-gains exemption is mentioned, but acquisition timing, household ownership, actual residence and later moving obligations matter independently of the price comparison.
This calculator combines a replacement-home checklist with buying-versus-jeonse costs over one common period.
Jeonse is the Korean refundable-deposit lease arrangement used here, not a monthly-rent model.
The results help original association members and their families prepare documents, compare assumptions and plan a tax consultation; they are neither a tax return nor a binding exemption decision.
Korea-specific 2026 rules
Official sources were checked on 2026-10-22.
Entering historical or future dates does not switch the engine to the law applicable on those dates.
Supported projects are urban redevelopment and reconstruction under the relevant Korean urban renewal framework.
Other project types are outside this tool, not automatically legally ineligible.
Check the household and the original home first
The replacement-home exception is addressed in Income Tax Act Enforcement Decree Article 156-2(5).
The National Tax Service guidance checks the domestic one-home household position at replacement-home acquisition, not merely on project approval day.
Family ownership and rights that change between those dates need separate evidence.
- Confirm that the original home you owned was converted into an association occupancy right.
A successor who purchased the right after management-disposal approval is not treated as the same original-member case.
- The automated scope is a simple case without additional homes or rights beyond the replacement-home arrangement.
Overlapping exceptions, household separation and complex ownership require review rather than an automatic pass.
- Confirm at least one year of residence by the entire household in the replacement home.
The entire household moving to the newly completed home and continuing to live there is another requirement, not a substitute.
Exceptions involving education, illness, employment, business or departure overseas need professional examination of facts and documents.
Selecting an exception leaves the result pending.
Even a matching input checklist is not a final determination by the tax authority.
Understand acquisition, residence and disposal dates
Acquisition and replacement residence
Acquisition must be on or after project implementation approval; approval day is included in this input boundary.
Management-disposal approval is a reference date and does not replace implementation approval.
Check acquisition for residence during the construction period and at least one calendar year in the replacement home.
Use the tax-law acquisition date, not automatically the contract-signing date.
Moving and selling
The entire household must move into the completed home within three calendar years after completion and continue residing there for at least one year.
The replacement home may be sold before completion or within three years after completion.
A pre-completion sale is therefore not an automatic failure.
The checklist uses calendar anniversaries: one year for residence, three years from completion for moving and disposal, with boundary dates included.
It does not use financial days/365 to decide legal residence periods.
A February 29 anniversary is adjusted to the last day of February as a planning convention; confirm the actual legal period calculation.
Weekends and public holidays do not automatically extend these dates in this tool.
One year of continuous residence in the new home can finish after replacement-home disposal.
An outstanding future obligation remains conditional, even when the planned dates fit.
A planned move is not an actual move, and a future residence end date is not time already lived.
Interrupted residence and aggregation of multiple residence periods are not automatically evaluated.
Prepare evidence and distinguish unknown from zero
Dates/facts and costs/taxes have separate evidence states: unknown, assumed or confirmed.
A confirmed selection still needs a source note and a valid verification date.
Future dates and assumed figures produce a planning scenario rather than completed eligibility.
A blank amount means unknown; zero means a checked amount of zero.
- Buying inputs include purchase and disposal prices, acquisition taxes and related taxes, combined buy/sell brokerage and registration fees, total moving costs and annual holding costs.
Use actual quotations or checked amounts rather than an invented acquisition-tax rate.
- Buying and jeonse loan balances exclude any common relocation loan already entered separately.
The model applies constant balances and fixed annual rates throughout the same period.
- Jeonse inputs include the refundable deposit, jeonse loan, combined brokerage/guarantee fees and moving costs.
Apply the same opportunity-cost rate to equity in both options.
- Enter tax-deductible costs separately from economic costs.
Interest and holding costs must not automatically become tax deductions simply because the economic comparison includes them.
Amounts are in KRW, with comma formatting and decimal interest rates.
Negative amounts, combined additional and common relocation loans above the purchase price or jeonse deposit, invalid calendar dates and reversed schedules need correction.
Do not fill missing evidence with zero just to obtain a result.
Compare buying and jeonse over the same horizon
Y = actual elapsed days from replacement-home acquisition to disposal / 365.
Interest uses simple interest on a constant balance; annual holding costs and equity opportunity costs use the same Y.
This financial horizon is separate from the legal calendar-year residence test.
Buying pre-tax net cost B
Acquisition taxes + brokerage/registration + buying moving costs + annual holding costs × Y + purchase loan × rate × Y + common relocation interest + max(0, purchase price − purchase loan − common relocation loan) × opportunity rate × Y − (disposal price − purchase price)
Jeonse net cost J
Jeonse brokerage/guarantee fees + jeonse moving costs + jeonse loan × rate × Y + common relocation interest + max(0, deposit − jeonse loan − common relocation loan) × opportunity rate × Y
Do not add the purchase principal, loan principal or returned jeonse deposit again as a cost.
Buying already subtracts the disposal gain and includes financing costs; adding principal again would double count it.
The common relocation loan appears in both totals with the same balance, rate and period, so it cancels in the difference.
The special-case buying total is B plus the checked special-case tax, while ordinary taxation uses B plus the checked ordinary tax.
The comparison difference is J minus that buying total: positive means lower buying costs under the entered assumptions.
A negative net cost means the entered disposal gain exceeds modeled costs, not a guaranteed investment return or cash-flow forecast.
The KRW 1.2 billion threshold is not a tax rate
A qualifying replacement-home case does not necessarily exempt every part of a high-price disposal gain.
Income Tax Act Article 89 and Enforcement Decree Articles 156 and 160 also matter when the disposal price exceeds KRW 1,200,000,000.
The following is an indicative gain allocation, not the actual capital-gains tax.
Indicative taxable portion of the gain
max(0, disposal price − acquisition price − tax-deductible costs) × max(0, disposal price − 1,200,000,000) / disposal price
This allocates gain rather than applying a tax rate to sale proceeds above the threshold.
A non-positive gain produces a zero indicative allocation, without replacing the actual filing assessment.
At or below KRW 1.2 billion, the special scenario uses conditional zero tax only when the entered eligibility and evidence support that scenario.
Above it, enter the special-case tax checked by a tax professional.
Ordinary tax also requires an entered checked amount; the calculator does not invent a rate for holding periods, other homes, deductions or changing law.
Ordinary-tax comparison can be considered independently when its cost evidence is sufficient, even if special eligibility remains pending.
Worked synthetic planning example
This is a fictional explanation, not a market forecast or an actual tax quotation.
Assume approval on 2026-01-01, acquisition and replacement residence from 2026-10-01, and replacement residence ending 2027-10-01.
Completion, moving into the new home and replacement-home disposal occur on 2028-10-01; new-home continuous residence ends on 2029-10-01.
At the verification date 2026-10-22, later residence and moving remain future obligations.
Prices, costs and finance
Purchase is KRW 500,000,000 and disposal KRW 540,000,000; acquisition taxes are 10,000,000, brokerage/registration 4,000,000, buying moving costs 2,000,000 and annual holding costs 1,000,000.
The purchase loan is 200,000,000 at 4%; jeonse deposit 300,000,000 with a 100,000,000 loan at 4%, and jeonse fees and moving costs of 2,000,000 each.
Use a 2% equity opportunity rate and a common 100,000,000 relocation loan at 3%, with tax-deductible costs of 14,000,000 and an assumed ordinary tax of 10,000,000.
The common relocation loan also finances housing: purchase equity is 200,000,000 and jeonse equity is 100,000,000.
The horizon is 731 days, so Y = 731/365.
Buying pre-tax net cost = −24,000,000 + 16,000,000 × Y; jeonse net cost = 4,000,000 + 9,000,000 × Y.
Rounded to KRW, buying costs 8,043,836 and jeonse costs 22,024,658, with a conditional special-case advantage of 13,980,822.
Ordinary-tax buying costs 18,043,836 with an advantage of 3,980,822.
Fixed-tax break-even disposal prices are 526,019,178 for the special assumption and 536,019,178 for ordinary taxation.
The one-year replacement-residence anniversary is 2027-10-01 and the completion-based moving/disposal deadline is 2031-10-01, independently of 731/365.
New-home residence ending after disposal does not itself make the schedule invalid.
Recalculate when the family schedule, evidence or disposal assumption changes rather than reusing this example as a personal conclusion.
Break-even prices and practical scenarios
Break-even disposal price = purchase price + buying costs before subtracting the disposal gain + fixed assumed tax − J.
This is fixed-tax sensitivity, not a recalculation of tax as the disposal price changes.
If a zero-tax special-case break-even price exceeds KRW 1.2 billion, the figure is withheld rather than extending a zero-tax assumption across the threshold.
- A construction delay can change both later deadlines and financing/holding costs.
Update the horizon as well as the move date.
- For households approaching retirement, compare a lower disposal price and higher financing costs separately instead of assuming appreciation.
Include the opportunity cost of personal funds.
- If school or employment prevents every household member from moving, check the residence rule and any exception before relying on favorable costs.
An economic advantage does not waive a legal condition.
The model excludes deposit-recovery losses, price predictions, changing loan balances after principal repayment, discounted cash flow and reinvestment.
It does not monetize differences in living conditions.
Refresh financing terms, service quotations and tax advice before signing.
How to use the result and prepare documents
- Check implementation approval and completion documents, then establish the tax-law acquisition and disposal dates.
Do not substitute management-disposal approval.
- Record household homes and rights at acquisition, original-member status and actual family residence.
Leave unknown facts unknown.
- Enter comparable contract, finance and tax quotations with source notes and verification dates.
The example button loads assumptions, not your evidence.
- Read the checklist, cost breakdown and special/ordinary scenarios together.
Review pending reasons and future obligations before reading the cost difference as actionable.
- Save TXT, print the result or export ICS dates.
Preserve assumptions, unknowns and verification dates in the material shared with your adviser.
Resident-registration records alone do not always establish actual residence conclusively.
Prepare appropriate household living evidence, contracts, settlement records, ownership documents and tax confirmations.
Calendar exports assist planning; they neither fulfill legal conditions nor submit a tax return.
Frequently asked questions
Does acquisition on approval day count?
The input boundary includes implementation approval day.
Actual tax-law acquisition, construction-period residence purpose and all other conditions still require checking.
What if I bought an occupancy right after management approval?
NTS guidance distinguishes a successor purchaser after management-disposal approval from an owner whose original home became an occupancy right.
Association membership alone does not establish the supported original-member case.
Can I sell before construction is complete?
Pre-completion disposal is allowed by the rule and is not an automatic failure.
Replacement residence and later moving and continuous residence conditions still need to be met.
Can the new-home residence year finish after disposal?
Yes, its completion can occur after replacement-home disposal.
Until the future obligation is actually fulfilled, a planned schedule remains conditional rather than a final exemption.
Is the full gain taxable above KRW 1.2 billion?
The special case also requires high-price gain allocation analysis.
The indicative allocated gain is not tax; enter professional advice reflecting the applicable deductions and rates for the actual tax comparison.
What happens if a later condition is not fulfilled?
Review Enforcement Decree Article 156-2(12) and (13).
When nonfulfillment occurs, check the reporting and payment requirement within two months from the end of the month containing the triggering event, and obtain tax advice promptly.
Should unknown fees be entered as zero?
No: zero means a checked zero amount.
Replacing unknown costs with zero can make an option look artificially favorable; preserve blanks and evidence states until checked.
Does a buying advantage mean the transaction is safe?
No: the comparison uses your disposal-price assumption, fixed rates and tax figures.
It does not guarantee prices or legal treatment, and financing changes, deposit risks and actual household residence need separate review.
Official sources and future rechecks
The National Law Information OPEN API verified the current Enforcement Decree, ID 003956 / MST 290841, promulgated 2026-09-30 and effective 2026-10-01.
Income Tax Act ID 001565 / MST 280405 has an overall effective date of 2026-07-01; the relevant Article 89 provision is effective 2026-01-01.
A statute-wide effective date and an individual article effective date are not interchangeable.
Recheck amendments, transitional provisions, actual acquisition/disposal dates, other ownership rights, the high-price threshold and actual later residence.
Changes after the verification date and individual tax assessments are not automatically incorporated.
Use current official evidence and professional review before the real transaction.
Start with the family schedule and checked tax figures
Enter your documents above and review residence anniversaries, moving plans, disposal deadlines and missing costs first.
Separate hoped-for tax savings from housing costs you can actually finance.
Save the result and evidence checklist to discuss with your family, association and tax adviser before deciding when to buy or sell.