Extension of Local Tax Reduction Benefits for Real Estate Acquired by Youth Startups and Venture Companies

[Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] Lee In-seon, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Venture Business Committee from the People Power Party, proposed a partial amendment to the 'Local Tax Special Cases Restriction Act' on the 20th to extend and expand local tax reduction benefits for young startups and venture small and medium enterprises (hereinafter referred to as startup SMEs) struggling due to COVID-19.

The current law provides special cases that reduce acquisition tax and property tax on real estate acquired for a certain period after startup SMEs establish their business or are certified as venture companies. The main point of the amendment is to extend the sunset clause of this law, which is set to expire on December 31, 2023, by two years until December 31, 2025.

It also includes extending the acquisition tax reduction period from the current 4 years (5 years for young companies) from the startup date or certification date to 5 years (6 years for young companies), and extending the 50% property tax reduction period from 2 years to 3 years, respectively.

Rep. Lee stated, "Considering the ongoing economic difficulties and the effectiveness of the special cases, the local tax benefits for startup SMEs should be extended and expanded to contribute to revitalizing our economy."