[Edaily Reporter Choi Jeong-hee ] In the fall of 2015, Mr. Kim purchased an apartment in Gyeonggi Province and began living there with his wife and children in late November of that year. Mr. Kim lived in this apartment with his family for about 1 year and 10 months.

Then, in 2017, Mr. Kim decided to start a travel business and left the country with his wife and children. He would occasionally return to Korea to stay at the apartment, and in September 2024, he sold the apartment and paid capital gains tax (hereinafter referred to as “capital gains tax”).

However, Mr. Kim realized that he had missed out on the capital gains tax exemption available to owners of one home per household.

In January 2026, Mr. Kim submitted a request to the tax office, stating, “I am a ‘one household, one home’ owner,” and asked for an exemption from the capital gains tax. However, the tax office rejected the request. Mr. Kim felt it was unfair that he was not recognized as a “one-household, one-home” owner, even though he had been running a business overseas and had been paying both comprehensive income tax and value-added tax all along. In April, Mr. Kim filed an appeal with the Tax Tribunal. Could Mr. Kim have been eligible for the capital gains tax exemption?

The Whole Family Abroad, But My Workplace Is Still ‘Korea’

Mr. Kim decided to go into the travel business. In September 2017, he left for a foreign country with his family, but he did not sell his apartment in Gyeonggi Province. His registered residential address also remained the same.

Subsequently, in May 2019, Mr. Kim registered a travel agency named “A” in Korea. Although he lived abroad and ran the travel business from there, his customers and revenue were based in Korea. Shortly thereafter, in 2020, the COVID-19 pandemic struck, bringing the travel industry to a standstill.

Mr. Kim entered South Korea in October 2020 and lived in the apartment until October 2021. Leaving his wife and children abroad, he came alone and stayed for about a year. His family reportedly could not join him because flights had been suspended. In October 2021, Mr. Kim left for abroad again.

In September 2024, Mr. Kim entered South Korea and sold the apartment. He reported that his entire family was “residing overseas.” He stayed for only four days to sell the apartment, then left the country and did not return to South Korea. He had also paid all capital gains taxes on the proceeds from the sale.

About a year later, in January of this year, Mr. Kim realized that he owned only one apartment in Gyeonggi Province, had held it for nine years, and had even lived there. In other words, he believed he was eligible for the capital gains tax exemption for “one household, one home.”

The tax office did not accept this claim, however, because the “one household, one home” capital gains tax exemption applies only to residents. From the tax office’s perspective, Mr. Kim was a non-resident.

According to the Income Tax Act, a resident is an individual who has a domicile in Korea or has resided in the country for 183 days or more. A person is considered a resident if they meet either of these criteria. A domicile is determined by considering factors such as whether the individual lives with family members in Korea, the presence of domestic assets, and whether they have a job that requires them to reside in the country for 183 days or more. In the tax office’s view, Mr. Kim was not a resident.

After leaving the country with his family in 2017, Mr. Kim stayed in Korea for 23 days in 2019, 77 days in 2020, 213 days in 2021, 0 days from 2022 to 2023, and 4 days in 2024. Mr. Kim’s wife and children stayed for 11 days in 2018 and 16 days in 2019, and did not enter Korea at all from 2020 through 2023. In 2024, when the apartment was sold, his wife did not enter the country at all, and only his children stayed for 46 days.

Mr. Kim dutifully paid both comprehensive income tax and value-added tax on the business income he earned in 2024 through Business Site A in Korea, so he could not accept being classified as a non-resident. He found it incomprehensible that he was treated as a resident when paying taxes but labeled a non-resident when he requested a tax reduction. Furthermore, Mr. Kim’s National Health Insurance status was registered as a domestic regional subscriber. Mr. Kim argues that while he does hold a foreign visa, it is merely a short-term employment visa set to expire in March 2026.

Mr. Kim argued, “If I were a non-resident, my business income would have been classified as ‘business income of a non-resident derived from domestic sources,’ and a separate taxation method would have been applied. However, it is inconsistent for the tax office to exercise its taxing authority in the same manner as for a resident regarding the comprehensive income tax and value-added tax returns I filed, yet treat me as a non-resident solely for capital gains tax purposes.”

The tax office countered that even people living abroad must pay taxes in Korea on money earned in Korea. The tax office stated, “Paying comprehensive income tax and value-added tax fulfills one’s tax obligations, and eligibility for the ‘one household, one home’ tax exemption depends on whether one is a resident or not, so it is unrelated to the taxes paid previously.”

The Year You Sell Your Apartment: What Is Your Status?

However, the Tax Tribunal (Case No. 2026So2396) also ruled against Mr. Kim.

There was no issue with Mr. Kim’s apartment itself. Since he purchased it in 2015, he only needed to hold it for at least two years—without any residency requirement—and he had held it for nine years. The problem was not the property, but the person. Tax exemption is determined by whether the individual is a resident on the “day the property is sold”; on September 4, 2024, the day he sold the apartment, Mr. Kim was a person whose family, work, and life were all overseas.

The Tax Tribunal first examined whether Mr. Kim’s business required him to reside in Korea. It determined that even though he operated Business Site A in Korea in 2019 and conducted business with domestic customers, there was no compelling reason for Mr. Kim to remain in the country. In fact, in 2024, he generated business income despite spending only four days in Korea.

The Tribunal also gave significant consideration to whether Mr. Kim had family living with him in Korea. However, his wife had not entered Korea even once in 2024, and his children had stayed for only 46 days in total.

According to the decision, while it is true that Mr. Kim was a regional subscriber to the National Health Insurance, there was no record of him paying premiums from 2022 to 2024. The overseas visa, which was purportedly a short-term employment visa, was actually a multiple-entry visa issued in June 2024—three months before he sold his apartment.

The Tax Tribunal ruled that when filing his comprehensive income tax return, Mr. Kim had merely classified himself as a “resident”; the tax office did not collect taxes on the basis of a determination that “you are a resident.” Even non-residents are subject to comprehensive taxation if they have a place of business in Korea. The only difference is that they are ineligible for certain deductions, such as the dependent deduction; otherwise, the filing process is essentially the same as when filing as a resident.

So, was Mr. Kim completely ineligible for the “one household, one home” tax exemption? Ultimately, Mr. Kim missed two opportunities.

If he had sold the property within two years of leaving the country in 2017, he could have sought the tax exemption. If an entire family moves abroad, the sale of a home within two years of departure is tax-exempt. This applies in cases of overseas relocation or when there is a valid reason to work or study abroad for at least one year. However, it remains to be determined whether Mr. Kim, who left for his own business rather than a company assignment, qualifies under this provision.

Another instance was in 2021, when Mr. Kim resided in Korea for 213 days. Since he stayed for more than 183 days, had he sold the house at that time, his grounds for claiming resident status would have been much stronger than they are now.

Under tax law, even if your home is in Korea, you are considered a non-resident if your life is centered abroad. This remains true even if you maintain a registered residence in Korea, have a place of business in Korea, or pay taxes in Korea.