Gyeonggi Residents with Combined Spousal Income Under 100 Million Won Exempt from Acquisition Tax on Homes Under 400 Million Won...Nation's First

As early as October, residents of Gyeonggi Province with a combined spousal income of 100 million won or less and at least one child will be eligible for a full exemption from acquisition tax when purchasing a home priced at 400 million won or less in Gyeonggi Province for the first time in their lifetime. This tax support measure for housing acquisition aimed at families with housing vulnerabilities raising one or more children is the first of its kind nationwide.

According to Gyeonggi Province on the 21st, the "Partial Amendment to the Gyeonggi Province Tax Reduction Ordinance," which includes these provisions, passed the 4th plenary session of the 271st Gyeonggi Provincial Council extraordinary meeting.

The amendment proposed by Gyeonggi Province contains a clause on "tax reduction for housing purchases by families with housing vulnerabilities." To qualify for the acquisition tax exemption, at least one child must be registered on the household resident registration, and neither the head of the household nor household members must have previously owned a home.

This ordinance amendment is one of the pledges of Governor Kim Dong-yeon of Gyeonggi Province during the 8th local government term. Gyeonggi Province explained the background of the pledge, stating that it aims to reduce the burden on residents without homes, activate home purchases, and stimulate the local economy through increased disposable income.

Since taking office in the 8th local government term, Gyeonggi Province immediately began proposing legal revisions and ordinance amendments, and after consultations with the Ministry of the Interior and Safety, received approval for the ordinance on May 15.

With the amendment passing the plenary session, it is expected to ease the housing acquisition burden for vulnerable groups in the province who have faced increased housing costs due to relatively high home prices.

In fact, as of 2020, Gyeonggi Province’s homeownership rate stood at 53.7%, significantly below the national average of 57.9%. Additionally, the apartment transaction price increase rate over the past five years has approached 81%, one of the highest nationwide, indicating a fragile housing security situation.

Choi Won-sam, head of the Gyeonggi Province Taxation Division, stated, "Although some tax revenue reduction is expected due to the ordinance amendment, it accounts for only about 0.12% of last year’s acquisition tax revenue, so the fiscal burden is not significant. We believe the positive effects, such as policy outcomes for increasing birth rates and activation of housing transactions through additional housing demand, are much greater."

Gyeonggi Province plans to ensure smooth tax support after the ordinance’s implementation through continuous consultations with cities, counties, and related organizations.