"Temporary Two-Homeowners, No Acquisition Tax Surcharge if Disposed Within Period"

Ministry of the Interior and Safety: Existing Acquisition Tax Rates Apply to Contracts Before July 10 Based on Acquisition Timing
General Sales Must Occur Within 3 Months After Enforcement Date, and Pre-Sales Within 3 Years

[Asia Economy Reporter Jo In-kyung] The Ministry of the Interior and Safety announced on the 14th that regarding the acquisition tax increase in the government's 'July 10 Housing Market Stabilization Supplementary Measures,' if a contract was signed before the announcement of the measures and the acquisition is completed within a certain period, the current tax rate will be applied as a transitional measure.

This measure applies an acquisition tax rate of 8% for households with two houses and 12% for those with three or more houses, regardless of the housing price, when conducting a paid housing transaction. The current acquisition tax rate is 1-3% depending on the housing price for up to three houses, and 4% for four or more houses.

The increased acquisition tax rate will apply to houses acquired after the enforcement date if the 'Local Tax Act Amendment Bill' passes the National Assembly. However, to protect taxpayers' trust, if a sales contract was made before the government's announcement date of July 10, the current acquisition tax rate will apply if acquisition is completed within three months for general sales and within three years for pre-sales from the enforcement date.

For 'temporary two-households,' where a single homeowner temporarily owns two houses during the process of relocating their residence, taxation will be based on one house if the previous house is sold within a certain period.

The Ministry of the Interior and Safety plans to first require reporting and payment of acquisition tax as one house for cases qualifying as temporary two-households, and later, if it is confirmed that the previous house was not sold, consider applying the two-household tax rate (8%) and collecting the difference.

An official from the Ministry of the Interior and Safety explained, "The purpose of this government measure is to strengthen acquisition tax on multi-homeowners and corporations to suppress speculative housing transactions beyond ownership for actual demand. Therefore, when acquiring a new house due to reasons such as job relocation or schooling, taxation will naturally be based on one house."

Details such as the disposal period for the previous house recognized as temporary two-households are expected to be stipulated later in the 'Enforcement Decree of the Local Tax Act,' referring to other tax laws. Regarding capital gains tax, the Enforcement Decree of the Income Tax Act considers a two-household owner who disposes of the previous house within 1-3 years (considering regulated areas) as a single household with one house.

The Ministry of the Interior and Safety plans to prepare the enforcement decree in line with the National Assembly's schedule for the Local Tax Act amendment and finalize and announce related details during the legislative notice period.

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