Gyeonggi-do, 'Acquisition Tax Reduction' for First-Time Home Buyers

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province will reduce acquisition tax for first-time homebuyers. This follows the revision of the Local Tax Special Cases Restriction Act, which came into effect on the 12th.

The amendment allows anyone purchasing a home for the first time in their life to receive acquisition tax reduction benefits regardless of marital status or age. Previously, newlywed couples who did not own a home were only granted a 50% reduction in acquisition tax for homes priced under 400 million KRW purchased within five years from the date of marriage.

With this revision, the reduction rate based on the home price has also been expanded. In the case of Gyeonggi Province, acquisition tax is exempted if the home price at the time of purchase is 150 million KRW or less, and a 50% reduction in acquisition tax is available for homes priced over 150 million KRW up to 400 million KRW.

Additionally, the previous size restriction of 60㎡ or less for the home’s exclusive area has been removed, broadening the options for residential area.

Furthermore, for newlywed couples, the income requirement has been relaxed. Previously, if a single-income household earned more than 50 million KRW, they were not eligible for the benefit. Now, regardless of whether the couple has a single or dual income, the target has been expanded to couples with a combined income of 70 million KRW or less.

Applications for the reduction can be made by reporting and paying acquisition tax at the city or county tax office where the home is located when purchasing a home for the first time in life by the end of next year.

Taxpayers who acquired homes (based on the final payment date) from the 10th of last month, the date of the government’s real estate policy announcement, can also receive a refund of acquisition tax if they meet the reduction criteria, even if they have already reported and paid the tax.

However, the home must be occupied as a single household within three months from the acquisition date, and continuous residence must be maintained for three years.

If these conditions are not met, or if the home is sold, gifted, or used for other purposes (such as rental) before the three-year continuous residence period, the reduced acquisition tax may be reclaimed.

Alongside this, the revision of the Local Tax Act has strengthened acquisition tax for multi-homeowners starting from the 12th.

Previously, acquisition tax rates were 1-3% for up to three homes and 4% for four or more homes based on acquisition price (600 million to 900 million KRW). The amendment now applies an 8% rate for two homes in regulated areas and three homes in non-regulated areas, a 12% rate for three or more homes in regulated areas and four or more homes in non-regulated areas, and a 12% rate for corporations regardless of the number of homes. However, an exception is made for temporary two-home ownership due to moving, work, or acquisition reasons, which is taxed as a single home.

Acquisition tax on gifted homes has also been strengthened. Previously, a 3.5% rate was applied regardless of the value of the gifted home, but the amendment applies a 12% rate for gifted homes priced at 300 million KRW or more in regulated areas.

A provincial official explained, "This revision of the Local Tax Act strengthens acquisition tax for multi-homeowners and corporations while easing the tax burden for first-time homebuyers among ordinary citizens, aiming to stabilize housing prices."

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