Article 98-8 (Special Taxation of Capital Gains Tax for Holders of Unsold Housing Upon Completion)

Where a resident leases a house, which is unsold housing upon completion as prescribed by the Presidential Decree, with an acquisition cost of 600 million won or less and a total floor area (or exclusive area in the case of an apartment house) of 135 square meters or less at the time of acquisition, and who enters into the first sales contract from January 1, 2015, to December 31, 2015, with a business entity, etc., that supplies housing pursuant to Article 54 of the 「Housing Act」, as prescribed by the Presidential Decree, and leases such housing for 5 years or more (limited to cases where the resident registers as a business operator under Article 168 of the 「Income Tax Act」 and registers as a private rental housing business operator under Article 5 of the 「Special Act on Private Rental Housing」, and enters into a lease contract before December 31, 2015), the amount equivalent to 50 percent of the capital gains generated from the acquisition of the house for 5 years from the date of acquisition shall be deducted from the taxable capital gains amount of the capital gains tax on such house. In this case, if the deducted amount exceeds the taxable capital gains amount, the excess amount shall be deemed non-existent. <Amended by Act No. 13477, Aug. 28, 2015; Act No. 13792, Jan. 19, 2016>

When applying Paragraph 1, the calculation of capital gains generated for 5 years from the date of acquisition of the house, the procedures for confirming unsold housing upon completion and lease periods, and other necessary matters shall be prescribed by the Presidential Decree.