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Here's the only correct answer to this question: "Nobody knows". According to Google, you need to identify your manipulative links, disavow or preferably remove them and then wait for a Penguin refresh.  However, they've never been clear on whether removing is necessary.  John Mueller hinted in a hangout that disavowing was the same as manually removing but then he went on to say that it could be better to manually remove. I have seen some sites make some sort of recovery with Penguin, but the scary reality is that very few do.  In order to recover you need to have a good base of natural links (not self made, but earned) and also be able to attract new links in the future.  And, you need to do an extremely thorough job on cleaning up your link profile. "we are looking to keep our domain but create a new site to disavow all our links. " - If you start up a new site on the same domain then you'll still have all of the same bad backlinks that got you into Penguin trouble so you won't be any further ahead.  EDIT:  That is, assuming that most of your links point to your home page.  If you have bad links pointing to inner pages then you can change those urls and effectively remove those bad links.  But, in most cases the bad links are pointing to the home page and those can't be removed by changing the site.