Gwangju City Operates Acquisition Tax System for Paid Housing Transactions

Gwangju City Hall

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] Gwangju Metropolitan City announced on the 26th that it has been implementing the revised acquisition tax system for paid housing transactions since this year.

The main points of the revised housing acquisition tax system are ▲ subdivision of acquisition tax rates for paid housing transactions priced over 600 million KRW and up to 900 million KRW ▲ application of a 4% acquisition tax rate for households owning four or more houses.

The previous housing acquisition tax rates were structured in a stepped manner: 1% for houses priced up to 600 million KRW, 2% for those over 600 million KRW and up to 900 million KRW, and 3% for those over 900 million KRW. This caused a threshold effect where even a slight increase in acquisition price at 600 million KRW and 900 million KRW would result in applying the higher tax rate bracket, significantly increasing the acquisition tax amount.

To resolve this, the tax rate increase of 1 percentage point at 600 million KRW and 900 million KRW was changed to a gradually increasing linear structure according to the acquisition price.

Accordingly, houses priced over 600 million KRW and up to 750 million KRW will have their tax rate lowered from 2% to between 1% and 2%, while houses priced over 750 million KRW and up to 900 million KRW will see their tax rate increase from the previous 2% to between 2% and 3%.

For houses in the price range over 750 million KRW and up to 900 million KRW where the tax burden increases due to this revision, if contracts were signed by December 31, 2019, and acquisition is completed by March 31, 2020 (for apartment sales, by December 31, 2022), the previous 2% tax rate will be applied.

Additionally, if a single household acquires four or more houses, the special acquisition tax rates of 1% to 3% for paid housing transactions will be excluded, and the general acquisition tax rate of 4% will be applied.

Here, a single household is based on the resident registration unit, and spouses and unmarried children under 30 years old are considered part of the same household even if living separately.

This provision also includes a transitional measure that excludes its application for houses contracted by December 3, 2019, to protect taxpayers' trust, if acquisition (final payment) is completed by March 31, 2020 (for apartment sales, by December 31, 2022).

Lee Seung-cheol, the city’s tax administration officer, said, “With this acquisition tax system improvement, we hope to enhance tax equity and establish a fair real estate transaction order,” adding, “We will continue to strive to implement local tax administration that citizens can trust.”

This content was produced with the assistance of AI translation services.