Following the Comprehensive Real Estate Tax, Acquisition Tax Surcharge Also Under Review for Removal... Government Likely to Lower from Up to 12%

[Asia Economy Sejong=Reporter Kwon Haeyoung] The government is considering lifting the heavy acquisition tax rates on multiple-homeowners, which were introduced by the previous administration, after about two years.

On the 14th, according to the government, the Ministry of Economy and Finance, the Ministry of the Interior and Safety, and the Ministry of Land, Infrastructure and Transport are internally discussing a plan to reform the acquisition tax heavy taxation system.

The government is reportedly reviewing a plan to lift the heavy acquisition tax system for multiple-homeowners, which is set at ▲8% for two-homeowners and ▲12% for those with three or more homes and corporations, and restore it to the previous system as one of the tasks in next year's economic policy direction.

Under the current Local Tax Act, a standard acquisition tax rate of 1-3% is imposed based on the value of the house when acquiring one home. On the other hand, a heavy tax rate of 8% or 12% is applied to those owning two or more homes and corporations.

[Image source=Yonhap News]

The government is considering lifting this heavy taxation system and reviewing as one of the reform plans the 2019 method of uniformly imposing ▲1% up to 600 million KRW acquisition price ▲2% for acquisition price exceeding 600 million KRW up to 900 million KRW ▲3% for acquisition price exceeding 900 million KRW. For individuals, the method before the July 10, 2020 measures, which imposed ▲1-3% based on house value for up to three homes ▲4% for four or more homes ▲and for corporations, 1-3% regardless of the number of homes based on house value, could also be an alternative.

Previously, the Moon Jae-in administration introduced this heavy acquisition tax rate system for multiple-homeowners and corporations in the July 10, 2020 measures to prevent further overheating of the real estate market during the rapid surge period. However, as the housing market has sharply cooled down this year, the government is also shifting its policy direction toward preventing a rapid decline in real estate prices.

The Ministry of Economy and Finance stated, "The government has not yet discussed or decided among related ministries on whether to reform the current heavy acquisition tax system, the method, or the timing of implementation," and explained, "The easing of heavy acquisition tax is a detailed task of the national agenda, and since the current government took office, the reform possibility and timing have been continuously reviewed."

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