Buying Your First Home in Korea: 7 Steps from Loan Pre-Check to Registration and Tax

The whole process at a glance (as of October 2026)

The most common first-time buyer mistake in Korea is doing things in the wrong order: falling in love with an apartment, wiring a holding deposit, and only then asking the bank how much it will lend. If the loan comes in lower than expected, you either lose your deposit or scramble for expensive financing. The table below shows the usual flow for buying an apartment. The gap between signing and closing is typically one to three months and is agreed with the seller.

Rules and lending limits change often. Figures here reflect October 2026; always reconfirm with your bank and official sites before you apply.

Step 1: Fix your budget and loan limit before you look

Your real budget is "own funds + loan you can actually get − transaction costs".

• Own funds: savings, investments you will sell, the deposit you will get back from your current rental, and money from family (if it is a gift, gift tax may apply).
• Loan amount: the lower of two limits applies. LTV caps the loan as a share of the home price; DSR caps your total annual loan repayments as a share of income. Our loan calculator uses these defaults: 40% LTV in regulated areas, 70% for first-time buyers, a maximum mortgage of ₩600 million in the Seoul metropolitan area and regulated areas, a 40% bank DSR limit and a 1.5 percentage point stress rate add-on.
• Transaction costs: acquisition tax (1.1% including local education tax for a single home of ₩600 million or less and up to 85㎡), the brokerage fee (0.4% to 0.7% cap for sales, plus VAT), legal scrivener fees, the cost of housing bonds you must buy at registration, moving and cleaning. Setting aside at least about 2% of the price is a safe habit.

Check government-backed loans early. In this site's October 2026 data, the Didimdol loan runs about 2.85% to 4.15%, the newborn special Didimdol loan 1.8% to 4.5%, and the Bogeumjari loan 3.9% to 5.0% a year. Each has income, asset and price limits, so run your numbers through Find government support. Best of all, get a pre-consultation at a bank so you have a concrete figure for the price range you are targeting.

Step 2: Searching and visiting

Narrow your search to two or three areas, then shortlist complexes with listings and the map. On site, check:

• Real commuting time at rush hour, and distance to schools, clinics and groceries
• Sunlight, noise from roads or rail, and parking depending on the building, floor and direction
• Signs of leaks on ceilings, window frames and bathrooms, plus condensation and mold
• Monthly maintenance fees and any redevelopment or remodeling plans
• If a tenant lives there, when the lease ends and whether move-out has been agreed

Step 3: Verify the price and the legal title

Judge price by actual deals, not asking prices. The Ministry of Land's real transaction price system shows recent sales for the same complex and unit size. Our guide on checking apartment prices with real transactions walks through the method.

Then check the legal paperwork yourself:

1. Property register: view it on the Internet Registry Office. Make sure the owner matches the seller, there are no seizures or injunctions, and note the size of any mortgage.
2. Building register: an "illegal building" mark can block loans and bring fines.
3. Land use plan: shows whether the area is a land transaction permit zone. In such zones you need a permit before signing and may have to live in the home yourself. Foreign nationals may face additional permit and reporting rules in some areas, so ask before you commit.

Step 4: Holding deposit and the main contract

For popular listings you will often hear "send a holding deposit first". Before you do:

• Confirm the bank account belongs to the registered owner (all co-owners must agree if jointly owned).
• Put the key terms in writing by text or messenger: price, down payment, interim and balance dates, included fixtures, and how any tenant will be handled.
• Agree in advance whether the holding deposit is refundable if someone changes their mind. If the terms are specific enough, even a "provisional" deal can be treated as a binding contract.

At signing you usually pay a down payment of 10%. Under the Korean Civil Act, until the interim payment is made, the buyer can cancel by forfeiting the down payment and the seller can cancel by returning double. Once the interim payment is made, cancelling unilaterally becomes difficult. Useful special clauses include keeping the home in its current condition, cancelling the seller's mortgage at closing, banning new mortgages or leases before closing, how serious defects like leaks will be handled, and the tenant's move-out date.

Step 5: Within 30 days, transaction report and funding plan

A home purchase must be reported within 30 days of the contract date; in brokered deals the agent usually files it. Alongside it comes the funding plan (자금조달계획서), a form explaining where the money comes from: your own funds (deposits, sold shares, gifts or inheritance, proceeds from selling another property) and borrowed funds (bank loans, a tenant's deposit you take over).

In regulated areas it is required regardless of price; elsewhere it applies above a set price, and in speculation-overheated districts you must attach proof such as bank balance certificates. Thresholds change, so confirm with your agent. If your actual money flow differs greatly from the plan, authorities may ask for an explanation, so decide in advance whether family support is a loan or a gift.

Step 6: Closing day checklist

1. In the morning, pull the property register again to check nothing new was registered.
2. The bank disburses your loan; confirm the seller's existing loan is repaid and the mortgage cancellation papers are ready.
3. Wire the balance, settle maintenance fees and utilities, receive keys and door codes.
4. A legal scrivener files the ownership transfer registration (you may also do it yourself).
5. File your move-in report within 14 days of moving.

Registration must be filed within 60 days of the balance payment, but if a bank loan is involved it is done on closing day because the bank needs its mortgage registered at the same time.

Step 7: Acquisition tax, when and how much

Acquisition tax is due within 60 days of acquisition (the earlier of the balance payment date and the registration filing date). Because the registry requires a tax receipt, most buyers pay on closing day via Wetax or at a bank.

Above 85㎡ of exclusive area, a 0.2% rural special tax is added. First-time buyers purchasing a home of ₩1.2 billion or less can get up to ₩2 million off the acquisition tax if they meet the conditions.

Example: ₩500 million, 84㎡, first home → ₩5,000,000 tax + ₩500,000 education tax − ₩2,000,000 relief = ₩3,500,000. Try your own numbers in the tax calculator.

Common first-time buyer mistakes

• Wiring a holding deposit before confirming the loan limit
• Leaving taxes, fees and moving costs out of the budget
• Trusting asking prices without checking real and cancelled deals
• Skipping the register re-check on closing day
• Not documenting whether family money is a loan or a gift
• Not fixing the tenant's move-out date in the contract
• Losing first-home tax relief by not meeting the residence condition