Approval of 'Local Tax Revenue Related Laws' at the Cabinet Meeting Including Expansion of First-Time Home Acquisition Tax Reduction

Contents Supporting Livelihood Stability and Economic Vitality

The Ministry of the Interior and Safety announced that the 'Local Tax Revenue Related Laws' and Enforcement Decree were approved at the Cabinet meeting on the 7th. This revision focuses on alleviating the living burdens of ordinary and vulnerable groups, including youth and the elderly, and revitalizing the regional economy through support for startup companies in areas experiencing population decline.

First, looking at support by policy target: ▲Acquisition tax on housing for first-time homebuyers (houses priced at 1.2 billion KRW or less based on actual transaction price) is fully exempted up to 2 million KRW ▲Introduction of a deferred payment system for property tax on housing for the elderly, etc. ▲For wage earners and small-scale self-employed individuals, the two lower brackets of the personal local income tax tax base are adjusted from 12 million KRW to 14 million KRW and from 46 million KRW to 50 million KRW, respectively ▲The corporate local income tax rates for each tax base bracket are reduced by 0.1 percentage points, among other key points.

Regarding tax reduction support by sector, ▲A new local tax special case is established for startups, business site installations, and business transformation companies in population-declining areas ▲Support for innovation in new growth and eco-friendly industries ▲To mitigate factors causing increases in living costs such as agricultural and fishery product prices and logistics costs, local tax reduction support for related public institutions is maintained and expanded ▲The local tax reduction benefits previously provided only to social welfare corporations and certain social welfare facilities (free nursing homes, orphanages, mother and child centers, Hansen’s disease care facilities) are expanded to all social welfare facilities.

The Ministry of the Interior and Safety plans to ensure smooth implementation by providing guidance so that local tax refunds can be processed stably under the enforcement of local tax revenue-related laws, and by supporting each local government to promptly revise ordinances without any setbacks.

Han Chang-seop, Vice Minister of the Ministry of the Interior and Safety, stated, “This revision of the local tax revenue-related laws aims to ease the burden on the living economy caused by high inflation and to revitalize the stagnant regional economy,” adding, “We will carefully manage follow-up procedures such as refunds to prevent any confusion or omission of tax benefits due to delays in the revision.”

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