Maximum Surcharge Rate Reduced to 1% for Properties Up to 200 Million Won
Retroactive Application for Acquisitions After January 2 This Year
The government has announced that it will adjust the acquisition tax surcharge threshold from 100 million won to 200 million won exclusively for local areas in order to revitalize local housing transactions. Previously, a tax rate of 8-12% was applied, but now only the basic tax rate of 1% will be imposed.
On the 22nd, the Ministry of the Interior and Safety stated that a partial amendment to the Enforcement Decree of the Local Tax Act, which includes this relaxation of the acquisition tax surcharge threshold, has passed the Cabinet meeting.
Under this amendment, for houses located in local areas with an officially assessed value of 200 million won or less purchased for consideration after January 2, 2025, the basic tax rate of 1% (for properties valued at 600 million won or less) will be applied regardless of the number of homes already owned, instead of the previous surcharge rates of 8-12%. Until now, owners of three homes in non-regulated areas were subject to an 8% acquisition tax surcharge, and those with four or more homes faced a 12% surcharge.
The government announced on the 22nd that it will adjust the acquisition tax surcharge threshold from 100 million won to 200 million won exclusively for local areas to revitalize local housing transactions. Yonhap News
Additionally, if a person acquires a house in a local area with an officially assessed value of 200 million won or less after January 2, 2025, and then purchases another new house, the house in the local area with an officially assessed value of 200 million won or less will be excluded from the count of owned homes. When calculating the acquisition tax rate for the newly purchased house, such properties in local areas will also be excluded from the number of homes owned by a household.
The scope of "local areas" to which the amendment applies refers to non-metropolitan areas, that is, regions outside the metropolitan area (Seoul, Gyeonggi, and Incheon) as defined in Article 2, Paragraph 1 of the Metropolitan Area Planning Act. Even if a sales contract was signed before January 2, 2025, if the final payment is made to the seller after January 2, 2025, the date of payment will be considered the date of acquisition for tax purposes, and the amendment will apply. These benefits will be granted not only to individuals but also to corporations.
Han Soonki, Director General for Local Finance and Economy, stated, "We hope that this amendment will help revitalize housing transactions in local areas and revive the sluggish housing market," adding, "We will continue to improve the local tax system in ways that can contribute to regional economic revitalization and the stabilization of people's livelihoods."
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