In the future, if multi-homeowners purchase low-cost dwellings priced at 'under 200 million won' in the provinces, the application of the additional acquisition tax will be excluded. Previously, the threshold for dwellings considered low-cost was set at 'under 100 million won,' which has now been eased to 'under 200 million won.' When the additional acquisition tax is applied, a tax rate of 8-12% is imposed, but now only a basic tax rate of 1% is required. This is a measure to revive the stagnant local housing market.
The Ministry of the Interior and Safety noted on the 22nd that the revision bill of the 'Local Government Tax Act Enforcement Decree,' which contains the easing of the criteria for the application of the additional acquisition tax, has passed the State Council.
According to this amendment, starting from January 2, 2025, in cases where dwellings with a public price of 200 million won or less are purchased in the provinces, the additional tax rate (8-12%) will not be applied when calculating acquisition tax. Only the basic tax rate (1% for dwellings under 600 million won) will apply. Previously, multi-homeowners in non-regulated areas faced an 8% tax rate for owning three dwellings and a 12% rate for four or more dwellings.
For example, A, who already owns two dwellings, suddenly had to transfer their job to a province outside the metropolitan area and intended to purchase an additional small apartment priced at 150 million won (transaction price of 200 million won) for residential purposes. Previously, being categorized as a multi-homeowner in a non-regulated area, they would have faced a burden of 16 million won (200 million won × 8%) due to the additional acquisition tax rate of 8%. However, with the recent amendment to the enforcement decree, now they only need to pay 2 million won (200 million won × 1%), significantly reducing the burden.
Additionally, after acquiring a dwelling priced at 200 million won or less in the provinces on or after January 2, 2025, if a new dwelling is purchased, the previous dwelling priced at 200 million won or less will also be excluded from the count of owned dwellings. It has been decided that when calculating the tax rate for the newly purchased dwelling, the dwelling priced at 200 million won or less will be excluded from the total number of dwellings held by a household.
The scope of the area to which the amendment applies refers to regions outside the capital (Seoul, Gyeonggi, Incheon) as defined by the 'Metropolitan Area Management Act,' specifically non-capital areas. Even if a sales contract was made before January 2, 2025, if the balance is paid to the seller after January 2, 2025, the amendment can still be applied. This is because the balance payment date is the date of the tax obligation establishment (acquisition date). The same benefits will be extended to individuals as well as corporations.
Han Soon-ki, head of the Local Government Finance Division at the Ministry of the Interior and Safety, said, "I hope this amendment activates housing transactions in the provinces, leading to the revival of the stagnant housing market," and added, "We will continue to improve the local government tax system to help invigorate the local economy and stabilize livelihoods."