"Acquisition Tax Exemption for Home and Car Swaps Without Profit"... Opposition's Kim Mi-ae Proposes Bill

Proposal for Partial Amendment to the Local Tax Special Cases Limitation Act

On November 4, Kim Mi-ae, a member of the People Power Party, sponsored a partial amendment to the Local Tax Special Cases Limitation Act, which would exempt citizens from acquisition tax when exchanging homes or cars for daily life needs.

Under the current law, acquisition tax is imposed on the acquisition value when real estate or vehicles are obtained through transactions such as sales or exchanges involving payment. There have been criticisms that imposing acquisition tax even in cases where homes or vehicles of the same or similar value are simply swapped, despite no actual profit or income being generated, results in an unreasonable tax burden for citizens.

The amendment introduces Article 148-2 (Tax Reduction for Acquisition of Homes and Vehicles via Exchange Transactions) in Chapter 3, Section 10 of the Local Tax Special Cases Limitation Act. It stipulates that acquisition tax will be exempted for home and vehicle exchanges that meet certain requirements. For home exchanges, this applies when both homes are below a certain price threshold and the price difference between them is within a specified limit.

Kim stated, "Changing homes or vehicles due to changes in living conditions is an everyday decision for citizens," adding, "I hope this bill will serve as an opportunity to reduce unreasonable tax burdens when exchanging homes and vehicles, and to enhance the rationality and fairness of the tax system."

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