"Only possible within 5% of market price"... Caution advised regarding capital gains and gift tax risks during low-price transfers between family members

An analysis has emerged stating that when conducting a 'low-price transfer'—trading real estate at a price lower than the market value—between family members, tax risks can arise for both the seller and the buyer. According to a video from the real estate specialized channel 'The Age of Real Estate Tax Savings', low-price transactions between specially related parties, such as parents and children, are subject to very strict standards under tax laws.

The difference between the 30% gift tax standard and the 5% capital gains tax standard

The taxes incurred during a low-price transfer differ depending on the position of the buyer (child) and the seller (parent). According to the explanation in the video, in the case of the buyer, gift tax is imposed under Article 35 of the Inheritance Tax and Gift Tax Act when the difference between the market value and the actual transaction price is equal to or greater than the smaller of '30% of the market value or 300 million won'. In other words, gift tax is calculated only for the portion exceeding this threshold.

On the other hand, for the parent, who is the seller, the 'denial of unfair act and calculation' regulation applies. The video explains that if a parent sells at a price lower than the market value, the capital gains tax can be recalculated and taxed based on the market value. The standard applied in this case is the smaller of '5% of the market value or 300 million won'. Therefore, if a transaction is conducted considering only the 30% discount rate used for the child's gift tax, the parent may bear the risk of capital gains tax being recalculated based on the market value. Consequently, the analysis suggests that to satisfy the standards for both parties, it is safe to transact within a 5% range of the market value.

Comparison of gift and low-price transfer tax amounts using a 3 billion won apartment case

The video specifically compared the difference in tax amounts between a gift and a low-price transfer using a 3 billion won apartment as an example. It assumed a situation where parents, who acquired a single house for 800 million won 10 years ago, conduct a low-price transfer to a child with no house at a 10% discounted price of 2.7 billion won.

First, if the entire 3 billion won is gifted, applying a 40% tax rate to the tax base after applying the 50 million won adult child deduction, the total tax burden, including gift tax and acquisition tax, reaches approximately 1.13 billion won. On the other hand, if a low-price transfer is conducted at 2.7 billion won, no gift tax occurs for the child, and the parent pays capital gains tax by recalculating the transfer value as 3 billion won according to the denial of unfair act and calculation regulation. In this case, the total tax, combining capital gains tax and acquisition tax, is calculated at around 349 million won, showing a structure where the tax burden is significantly lower than a simple gift.

However, it was mentioned as a variable that if the parents meet the requirements for tax exemption for a single household owning one house, the tax exemption benefit for the portion below 1.2 billion won may be maintained even if the transfer value is recalculated to the market value.

National Tax Service's intensive inspection of expedient gifting and the importance of proving the source of funds

Warnings regarding the strong post-verification by the National Tax Service also followed. According to the video, in July 2026, the National Tax Service caught about 80 people who evaded taxes through methods such as secret gifting or sham sales, collecting 31.8 billion won in additional taxes. In particular, expedient transactions between family members, such as transferring an apartment owned by parents to children at a significantly low price, were a major type of detection.

Furthermore, according to the 2026 amendment to the Local Tax Act, if the difference between the market value and the transaction price is 300 million won or more, or 30% or more compared to the recognized market value, it can be regarded as a gift rather than a normal sale, and a gift acquisition tax rate of up to 12% can be applied, which was also cited as a precaution. Above all, if the child cannot objectively prove the source of funds for the purchase price, the entire transaction may be presumed to be a gratuitous gift, and gift tax on the entire market value may be collected. The National Tax Service focuses on checking whether the sales contract matches the actual movement of funds, whether the child has their own income and assets, and whether principal and interest are being repaid through a promissory note.