50% Acquisition Tax Reduction for Home Purchases Under 300 Million Won in Depopulated Gunwi County, Daegu

Daegu City Ordinance Amendment Passes Standing Committee
Additional Acquisition Tax Reduction for Home Buyers in Gunwi County
Maximum 50 Percent Tax Cut for Homes Worth 300 Million Won or Less
Aimed at Supporting Depopulated Areas and Expanding Resident Population

Daegu City announced that a partial amendment to the municipal tax reduction ordinance, which exempts acquisition tax for people without a home or those with only one home per household who purchase a house worth 300 million won or less in Gunwi County, a depopulated area, passed the Planning and Administration Committee of the 316th temporary session of the City Council on April 24.

With this partial amendment to the Daegu City municipal tax reduction ordinance, an additional 25 percent reduction will be granted by ordinance, on top of the 25 percent reduction rate stipulated in Article 75-5 of the Restriction of Special Local Taxation Act for the acquisition of homes worth 300 million won or less in depopulated areas. This allows for a maximum acquisition tax reduction of up to 50 percent.

Daegu Gunwi County Office

This applies to people without a home who reside in other regions or in Gunwi County, or to those who own one home in another region and acquire a house worth 300 million won or less in Gunwi County. However, those who already own one home in Gunwi County are excluded from the special benefit.

Among the depopulated areas of Daegu City?Seogu, Namgu, and Gunwi County?only Gunwi County is eligible, as Article 35-6 of the Enforcement Decree of the Restriction of Special Local Taxation Act stipulates that, in the case of metropolitan cities, only counties are included.

This is in line with the government policy to exclude the Seoul metropolitan area and metropolitan cities, where real estate speculation is a concern, while including county-level areas within metropolitan cities. The aim is to provide tax benefits to non-residents and to expand the resident population.

Although the revised ordinance is scheduled to be promulgated in May 2025, the additional acquisition tax reduction for Gunwi County, a depopulated area, will be applied from January 1, 2025, the effective date of the upper law, the Restriction of Special Local Taxation Act, to December 31, 2026. The tax liability arises on the date the house, which is subject to acquisition tax, is acquired.

In addition, if a person purchased a house that qualifies for the reduction before the ordinance is promulgated, the reduced amount can be refunded through a request for correction in accordance with Article 50 of the Framework Act on Local Taxes.

Furthermore, if the house acquired with the tax reduction is sold or gifted within three years from the date of acquisition, the reduced tax amount will be collected retroactively. This measure aims to ensure both the effectiveness and fairness of the system.

Hwang Sunjo, Director of Planning and Coordination at Daegu City, explained the purpose of the ordinance amendment by stating, "We have pursued an additional acquisition tax reduction to strengthen specific and practical support for depopulated areas." He added, "We hope this will serve as an important means to reduce the financial burden of home purchases, expand the inflow of the resident population, and vitalize the local economy."