Korean Free Property Use Gift Benefit Calculator

Review Korean 2026 free property use benefits using annual 2%, five years and 10% discounting. Check the KRW 100 million threshold, shared owner residence exception, representative-user attribution, valuation scenarios and optional additional assessed tax.

Korean 2026 rules · Decree effective 2026-10-01 · verified 2026-10-02. Initial KRW 1 billion is fictional. Determination remains pending until facts are verified.

1. Value and statutory conditions

Rule year: 2026 · start dates 2026-10-01 through 12-31. Earlier/later starts and the next valuation need a separate law check.

2. Shared use and attribution unit

For clear areas, verify the corresponding property-value share. If areas are unclear and at least two users have the prescribed family relationship to the owner, review the representative rule: closest relative, then oldest if tied. Enter the combined share attributable to the representative; do not split it among relatives to avoid the KRW 100 million threshold. Select equal shares only after confirming that the representative rule does not apply.

3. Optional gift tax comparison

Enter the verified prior tax base rather than raw prior gifts. Check the remaining ten-year basic deduction: spouse KRW 600m; ascendant KRW 50m (minor recipient KRW 20m); descendant KRW 50m; prescribed other relatives KRW 10m. A zero default does not determine entitlement.

Insufficient information · pending

  • Confirm valuation-date value, fully free use, individual beneficiary and a single-owner attribution unit.
  • Verify the shared owner residence and associated land exception, including mixed-use floor-area rules.
  • Related-party status between owner and user is unverified.
  • Verify actual area/value attribution or the equal-area/representative-user rules.
Attributed share
Unknown
Attributed property value
Pending verification
Annual 2% benefit
Pending verification
Five-year discounted benefit
Pending verification
Difference from KRW 100m
Pending verification
Gift value candidate
Pending verification
Additional tax base
Pending verification
Additional assessed tax
Pending verification
Minimum value at this share
Pending verification

Below KRW 100m is excluded; at or above it, review the full benefit. Determination uses unrounded values; displayed amounts round to KRW. The minimum value is a mathematical boundary, not a tax-exemption guarantee.

This compares additional assessed tax, not final tax payable. Article 58 prior-tax credit, filing credits, generation-skipping, nonresidents, penalties and valuation fees need separate review. The marriage/childbirth special deduction does not apply to this benefit.

Value scenarios · same facts and attribution assumed

Lower, main and upper property value benefit and tax comparison
ScenarioValueFive-year benefitGift valueAdditional assessed taxStatus
Lower900,000,000 KRWPending verificationPending verificationPending verificationInsufficient information · pending
★ Main1,000,000,000 KRWPending verificationPending verificationPending verificationInsufficient information · pending
Upper1,100,000,000 KRWPending verificationPending verificationPending verificationInsufficient information · pending

Five-year valuation schedule

Annual benefit ÷ 1.1ⁿ, n=1–5. No proration by contract months. If use continues beyond five years, the next deemed start reference date: 2031-10-03 · recheck then-current value, use and law

1 year

Pending verification

Discount factor 0.909091

2 year

Pending verification

Discount factor 0.826446

3 year

Pending verification

Discount factor 0.751315

4 year

Pending verification

Discount factor 0.683013

5 year

Pending verification

Discount factor 0.620921

Input assumptions included in saved/printed worksheet
Rule year
2,026
Free-use start date
2026-10-02
Main property value (KRW)
1,000,000,000
Lower value scenario (KRW)
900,000,000
Upper value scenario (KRW)
1,100,000,000
Shared owner residence and land exception
Unknown
Related-party status
Unknown
Justifiable reason for unrelated parties
Unknown
I verified value, fully free use, individual beneficiary and single-owner attribution
Unconfirmed
Benefit attribution method
Unknown
Verified area or representative attribution (%)
100%
Total users with unclear actual areas
2
I verified the selected attribution and the conditions below
Unconfirmed
Verified prior ten-year aggregate tax base (KRW)
0
Verified remaining basic gift deduction (KRW)
0
I verified ordinary resident rates, ten-year aggregation and remaining basic deduction
Unconfirmed

2026 · Act MST276123 Article 37 · Decree MST290845 Article 27 · Rule MST284609 Article 10 · 2026-10-02

Next step: collect the use agreement, valuation, floor plan, relationship/residence evidence and prior-gift records for a tax review with this worksheet.

Related calculators

Free property use can require gift tax review without a title transfer

A child living separately in a parent-owned apartment or an individual using a family-owned building for business can receive a use benefit even when ownership stays with the owner.
This calculator values that benefit before comparing the statutory threshold and application conditions.
It uses Korean 2026 tax rules, rather than the gift or rental rules of another jurisdiction.

Who is this worksheet for?

Parents and adult children preparing a free-use arrangement, individual operators using family premises, and people sharing a building can review the benefit and missing facts here.
The main output is a discounted use benefit, rather than a market-rent estimate or acquisition tax on a property transfer.
Identify the transaction substance before selecting inputs.

Prepare evidence for the next decision

Collect the use agreement, move-in or actual-use evidence, valuation-date property documents, floor plan, relationship and shared-residence evidence, and prior-gift records.
Save the worksheet with its confirmation states so an adviser can see which facts were verified and which assumptions may change the result.
Saving a worksheet does not submit a tax return or contact an adviser.

Check the shared owner residence exception and unrelated-party conditions

Article 37 of the Inheritance Tax and Gift Tax Act excludes a house occupied together with its owner and the associated land.
Family membership alone does not exclude every home or business property.
If the owner lives elsewhere and the child alone uses the house, the shared-residence exception cannot automatically be applied.

Verify the statutory residence facts

A shared registered address alone does not establish actual shared residence or the substance of the property use.
For a shop inside a house or another-use building on the same plot, also examine Decree Article 27(7).
Its whole-property house treatment requires residential floor area to exceed nonresidential area.
Do not classify an entire mixed-use property as an excluded home without reviewing that condition.

Transactions between unrelated parties

Article 37 applies to unrelated parties only where there is no justifiable reason under commercial practice.
A confirmed justifiable reason produces a conditions-not-met result; an unknown reason leaves the determination pending.
Related-party status requires review under Decree Article 2-2 and should not be inferred solely from how the parties describe their arrangement.

Understand property value, start date and valuation scenarios

Enter the property value determined under Chapter 4 of the Act.
Article 60 generally uses market value on the valuation date and requires prescribed valuation methods when market value is difficult to determine.
An asking price, online estimate, book amount or publicly announced value is not automatically a confirmed tax valuation.

The actual start date determines the gift date

Article 37(1) treats the start of free use as the gift date.
If signing and actual occupation differ, review move-in or business-use records.
This implementation supports starts from 2026-10-01 through 2026-12-31 with the 2026 rule year fixed.
Other dates remain pending until their then-applicable rules are checked; entering a different date does not silently apply this law version to it.

Use comparable lower, main and upper values

The initial main value of KRW 1,000,000,000, lower value of KRW 900,000,000 and upper value of KRW 1,100,000,000 are fictional examples.
Replace them with your reviewed valuation range, keeping lower ≤ main ≤ upper.
All three scenarios assume unchanged use facts and attribution.
They are neither valuation confidence intervals nor estimated probabilities.

Separate actual-area attribution from the representative-user rule

A larger number of family users does not automatically allow the total benefit to be divided among them for separate threshold tests.
Where actual use areas are clear, verify the share of property value attributable to those areas.
Ownership percentages and use-benefit attribution can differ, so do not copy an ownership share without reviewing actual use.

Equal areas when actual use areas are unclear

Decree Article 27(2) treats users as occupying equal areas when actual areas are unclear.
It also requires a representative-user review where at least two users have the prescribed family relationship with the owner under Article 2-2(1)(1).
The equal-share option is therefore appropriate only after confirming that the representative rule does not apply.
The number of users is not a substitute for that finding.

Attribution to the family representative

Rule Article 10(1) identifies the representative as the closest relative to the owner, or the oldest among equally close relatives.
Enter the reviewed combined share attributable to that representative.
Do not give each relative a separate KRW 100 million threshold for a benefit attributable to the representative.
This worksheet does not infer a representative from a family list or automatically resolve multiple owners or donors.

Annual 2%, five years and a 10% discount rate

Attributed property value W equals reviewed property value V multiplied by the verified attribution share.
Annual benefit is W × 2%.
The five annual amounts are discounted and added: B = Σ(W × 2%) / 1.1ⁿ, n=1..5.
The 10% rate in Rule Article 10 converts the use benefit to present value; it is distinct from gift tax rates.

No arbitrary monthly proration

The general valuation structure in Decree Article 27(3) sets the free-use period at five years.
A one-year or two-year contract does not cause this model to prorate the benefit by actual contract months.
Early termination or changes in use require separate evidence and a review of their actual tax consequences.
The five-year schedule is a valuation calculation, rather than a rent payment schedule.

Use continuing beyond five years

The Decree treats the day after five years from the initial start as a new start of free use.
For 2026-10-02, the reference date is 2031-10-03.
Recheck the value, use relationship and law then in force.
This date is a continued-use reference and does not establish future tax or automatically impose the same tax every year.

KRW 100 million is a threshold, not a subtraction from the benefit

Decree Article 27(4) sets the threshold at KRW 100,000,000.
A discounted benefit below it is excluded from this Article 37 use-benefit treatment.
At or above it, the full benefit is the gift-value candidate.
Do not subtract KRW 100 million again and tax only the excess.
This distinction creates a substantial change around the boundary.

Compare the unrounded boundary

For 100% attribution, the first whole-KRW property value meeting the threshold is KRW 1,318,987,404.
A value one KRW lower falls on the other side.
Determination uses exact rational arithmetic before display rounding, while the screen rounds amounts to KRW.
Similar displayed benefit amounts can therefore have different threshold results.
Check the determination rather than recomputing it from a rounded display.

Interpret the threshold difference

A negative difference means the formula benefit is below KRW 100 million; a positive difference means it is above.
If valuation, attribution, residence or relationship remains unverified, the number is only a conditional formula comparison.
The minimum property value is a mathematical boundary, not a guarantee of exemption or permission to choose an artificially lower valuation.

Worked examples: KRW 1 billion, KRW 1.5 billion and shared attribution

These examples assume a verified property value, fully free use by one individual and no shared owner residence exception.
All amounts use KRW, and the examples do not establish an actual market value or tax ruling.
The benefit threshold is tested before remaining deductions and prior gifts are considered in the optional tax stage.

Sole use of KRW 1 billion property

For a value of KRW 1,000,000,000, the annual 2% benefit is KRW 20,000,000.
Five years discounted at 10% produces about KRW 75,815,735, below the threshold.
That amount is the assessed use benefit, not tax after deductions or rent that must actually be paid.
Its rounded Korean expression is approximately KRW 75.816 million.

KRW 1.5 billion with different attribution

At KRW 1,500,000,000 and sole use, the discounted benefit is about KRW 113,723,603 and the full amount becomes the gift-value candidate.
A verified 50% share gives about KRW 56,861,802, below the threshold.
A representative with a verified combined 100% attribution must not be replaced with two assumed 50% family users.
Facts determine which calculation applies.

Prior gifts, remaining basic deduction and additional assessed tax

Optional tax comparison needs the verified prior ten-year aggregate tax base P and remaining basic deduction D.
Added tax base is max(0, B − D).
The comparison is T(P + max(0, B − D)) − T(P).
It measures the increase in ordinary assessed tax and is not final tax payable.
Do not enter raw prior-gift amounts as if they were an already reviewed tax base.

Review ten-year aggregation and deduction balances

Resident basic deductions are KRW 600 million for a spouse, KRW 50 million for an ascendant (KRW 20 million for a minor recipient), KRW 50 million for a descendant and KRW 10 million for prescribed other relatives.
Enter the remaining balance after prior deduction use.
Article 47(2) aggregates qualifying same-donor gifts over the preceding ten years where the total reaches KRW 10 million; an ascendant donor includes the spouse for this purpose.

Conditional tax example for KRW 1.5 billion

With B approximately KRW 113,723,603, P zero and D KRW 50,000,000, the added tax base is about KRW 63,723,603 and additional assessed tax is about KRW 6,372,360.
Tax bases below KRW 500,000 are not assessed; exactly that amount is included.
Ordinary progressive rates are 10%, 20%, 30%, 40% and 50%.
Article 58 prior-tax credits and their limits require separate review.
The Article 53-2(4) marriage/childbirth special deduction does not apply to an Article 37 benefit.

Step-by-step use and worksheet saving

Edit whole-KRW amounts with comma formatting and attribution percentages with up to two decimals.
Leave unknown facts unconfirmed until evidence is available.
A pending result is different from zero tax, and the calculator does not fill in missing legal or valuation findings for you.

Follow the verification sequence

First enter the actual start date and reviewed lower, main and upper property values.
Next verify the statutory residence exception, related-party status and any justifiable reason for unrelated parties.
Then confirm the actual-area or representative attribution unit.
After reviewing the threshold, optionally enter the prior aggregate tax base and remaining basic deduction and confirm that ordinary resident assumptions apply.

Reconfirm after changing inputs

Changing values clears valuation-fact confirmation; changing the attribution method, percentage or user count clears attribution confirmation.
Changes to input assumptions also clear optional tax confirmation.
Save TXT or print the current worksheet with inputs, law version, pending reasons, valuation schedule and scenarios.
Reconfirmation avoids carrying an old finding into a new result.
Preparing documents and handing them to an adviser remains your next action.

Practical scenarios and calculation limits

Before a child moves into a separately occupied home, check whether actual shared residence with the owner exists and collect valuation-date evidence.
Before agreeing on free business premises, identify the land or building being used, the individual or corporate beneficiary and whether any consideration is paid.
Shared users should establish the floor plan and representative-user finding first.

Compare a reviewed valuation range

When evidence supports more than one candidate value, compare the same attribution and use assumptions across the three scenarios and see whether the threshold result changes.
If the statutory facts also change across cases, review them separately rather than holding them constant.
Neither a scenario ranking nor a threshold difference is an estimated likelihood of a tax decision.

Transactions requiring another review

Free collateral use to borrow money belongs to Article 37(2), a separate regime from this property-use model and from interest-free family lending.
Partial rent, corporate beneficiaries, multiple owners or donors, generation-skipping surcharges, nonresidents, valuation fees, filing credits, penalties and other taxes need separate review.
An exclusion here is not a finding that all taxes are exempt.

Frequently asked questions

Can tax review be needed without receiving ownership?

Yes.
Article 37 addresses the benefit of free property use.
Test the benefit threshold and any verified statutory exception separately from a title-transfer gift.

Is living with a parent automatically excluded?

Verify actual shared residence in a house owned by that parent and the associated land.
Mixed-use property also needs the floor-area review under Decree Article 27(7).
Choose unknown when evidence is insufficient.

Is only the amount exceeding KRW 100 million a gift?

No.
At or above the threshold, the full benefit is the candidate.
KRW 100 million is not subtracted again.
Remaining basic deduction is reviewed later in the optional tax stage.

Does a one-year contract use only one annual benefit?

The general structure values five years.
This model does not arbitrarily prorate by actual months.
The effect of termination or changed use needs separate evidence and law review.

Can two family users always split the benefit equally?

No.
With unclear actual areas and at least two prescribed family users, review the representative-user rule first.
Closest relationship and oldest age if tied determine the representative; verify the combined attribution rather than splitting to reduce the threshold.

Can I add the marriage or childbirth special deduction?

Article 53-2(4) excludes Article 37 benefits from that special deduction.
Do not add its amount to the remaining basic-deduction field.

Is the additional assessed tax the amount to file?

It is an ordinary-rate increase comparison, not final tax payable.
Actual prior-tax credit and its cap, filing credit, surcharges and penalties need separate review.

Can I save a pending result?

Yes.
Save the assumptions and pending reasons, collect the missing evidence and recalculate.
Saving does not complete a tax filing or an adviser consultation.

Official sources and effective dates

Current Korean provisions were verified through the National Law Information OPEN API on 2026-10-02.
For Act MST276123, the search effective date 2026-01-02 concerns partial commencement of Article 50; relevant articles show 2025-10-01.
Decree MST290845 is effective 2026-10-01 and Rule MST284609 is effective 2026-03-20.

Prepare evidence after reviewing the threshold

Organize the documents supporting the use arrangement and valuation, then save the worksheet for a Korean tax review.
Keep property-use benefits, ordinary gifts and family money loans separate so each next review uses the correct legal framework.

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