Special Tax Credit of 1 Million KRW Provided Upon Marriage

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The government will provide a special tax credit of approximately 1 million won for marriage. Capital gains tax, comprehensive real estate tax, and automobile tax will also be restructured to be more favorable for households with marriage and childbirth.

The Low Fertility and Aging Society Committee held a meeting on the 19th at the HD Hyundai R&D Center Asan Hall in Seongnam, Gyeonggi Province, chaired by President Yoon Seok-yeol, and announced measures to reverse the low birthrate trend. The measures include plans to expand tax incentives for childbirth and childcare.

First, couples who register their marriage will receive a special marriage tax credit benefit. Joo Hyung-hwan, the senior vice chairman, explained, “There have been no tax incentives related to marriage so far,” and added, “We will establish a special marriage tax credit of about 1 million won to strengthen support throughout the life cycle.” However, the specific eligibility criteria and credit amount will be announced in this year’s tax law amendment bill prepared by the Ministry of Economy and Finance.

Tax benefits related to home ownership will also be expanded. Currently, if a man and woman each owning one house marry and become a two-household, they are considered as owning one house for five years; this period will be doubled to 10 years. This means they can enjoy a capital gains tax exemption of up to 1.2 billion won for a long period. The comprehensive real estate tax basic deduction will be up to 1.2 billion won, and a tax credit of up to 80% for elderly and long-term owners will also be applicable.

The child tax credit will be increased to alleviate the economic burden of childcare. Currently, the tax credit benefits are 150,000 won for the first child, 200,000 won for the second child, and 300,000 won for the third child. These amounts will be increased by 100,000 won each.

Automobile acquisition tax exemption benefits will be expanded from households with three or more children to those with two or more children. Until now, households with three children have been exempted from acquisition tax up to 2 million won, and if the amount exceeds that, 80% of the tax is reduced. However, considering fairness and the impact on local finances, the reduction rate for households with two children will be reviewed later. Since the current system is scheduled to end this year, the sunset period will be extended by three years.

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