Buy your first home in Korea and the acquisition tax is cut by up to 2 million won, provided the purchase price is 1.2 billion won or less. The old income test — combined household income under 70 million won — has been abolished, so income no longer matters. But 2 million won is a flat cap rather than a percentage, so the share of the tax bill it removes shrinks sharply as prices rise. On a 300 million won home it wipes out two thirds of the tax; on a 1.2 billion won home, 5.6%.
No income test — ownership history is the gate
What decides eligibility is prior home ownership, not income. Geumcheon-gu Office in Seoul requires that neither the buyer nor their spouse has ever owned a home. If a spouse owned and sold a property before the marriage, the household falls out of scope. The test also runs on the two individuals rather than the registered household — live with your parents and their ownership history does not count against you.
What counts as a home in that history varies, and officetels in particular turn on registered use and how they appear on the property tax rolls at the moment of acquisition. The way acquisition tax, capital gains tax and cheongyak (housing subscription) each count them differently is covered separately in this breakdown of when an officetel counts as a home.
Per Banksalad, the current conditions come down to three: buy a home for consideration at an actual transaction price of 1.2 billion won or less, move in within three months of acquisition and keep living there, and do not sell, gift or convert it to rental use within three years. The programme runs to 31 December 2028.
The same 2 million won, from 67% down to 5.6%
Acquisition tax on a purchased home runs at 1% up to 600 million won and 3% above 900 million, with a progressive band in between. In that band the rate is the price in hundreds of millions multiplied by two thirds, minus three — 1.667% at 700 million won, 2.333% at 800 million. The table below applies those rates, then the 2 million won cap, to show the actual burden and how much of it the relief removes. It assumes a unit of 85㎡ or less, so the rural development surtax is excluded; local education tax is not covered by the relief and applies separately.
| Purchase price (100m won) | Rate (%) | Tax before relief (10k won) | After 2m relief (10k won) | Share removed (%) |
|---|---|---|---|---|
| 3 | 1.000 | 300 | 100 | 66.7 |
| 4 | 1.000 | 400 | 200 | 50.0 |
| 5 | 1.000 | 500 | 300 | 40.0 |
| 6 | 1.000 | 600 | 400 | 33.3 |
| 7 | 1.667 | 1,166.7 | 966.7 | 17.1 |
| 8 | 2.333 | 1,866.7 | 1,666.7 | 10.7 |
| 9 | 3.000 | 2,700 | 2,500 | 7.4 |
| 12 | 3.000 | 3,600 | 3,400 | 5.6 |
Up to 600 million won the rate is fixed at 1%, so the share falls gently. Cross into the progressive band and the slope breaks. Going from 600 to 700 million won nearly doubles the tax, from 6 million to 11.67 million won, and halves the share removed from 33.3% to 17.1%. Set the Seoul apartment prices of the early 2020s, when the programme was designed, against today's, and the same 2 million won plainly carries less weight.
The cap is an amount, not a rate. While prices climb and the cap stays put, the programme keeps its name but sheds a little of its substance every year.
At 1.2 billion won, the bill jumps 2.3 million
The ceiling is a step, not a slope. At exactly 1.2 billion won you pay 36 million won of tax less 2 million, so 34 million. Go one won over and the relief vanishes entirely: a 1.21 billion won home is taxed at 3% for the full 36.3 million. A 10 million won difference in price produces a 2.3 million won difference in tax — 23% of the price increase lands as tax.
| Purchase price | Tax before relief (10k won) | Relief (10k won) | Net burden (10k won) |
|---|---|---|---|
| 1.19bn won | 3,570 | 200 | 3,370 |
| 1.20bn won | 3,600 | 200 | 3,400 |
| 1.21bn won | 3,630 | 0 | 3,630 |
Acquisition tax is not the only place these thresholds sit. Brokerage fee ceilings also change band at 900 million, 1.2 billion and 1.5 billion won, so nudging a contract price over a line raises the cost in a step. That structure is worked through in this calculation of the brokerage fee bands.
Three months and three years: two clocks that trigger clawback
The relief is not settled at acquisition. Two deadlines run at once. The first is moving in within three months. That is impossible when an existing tenant is still in place, and an enforcement decree amendment created an exception for it. Per Korea Policy Briefing, the Ministry of the Interior and Safety now allows the relief to stand without occupancy inside three months if the remaining lease term on the home is one year or less. Before the change, a tenant with three months or more remaining disqualified the purchase outright.
The second clock is three years. Under the current standard set out by Geumcheon-gu, what decides clawback is whether the home is sold, gifted or put to another use such as rental within three years of acquisition. Letting it out on a jeonse (lump-sum deposit lease) counts as conversion to rental. So leaving the home empty while working elsewhere and renting it out while working elsewhere produce different outcomes.
The 3 million won small-home cap has its own conditions
Not every case caps at 2 million won. Per Banksalad, small homes carry a 3 million won cap and apartments are excluded. Geumcheon-gu's guidance sets those conditions at under 60㎡ of exclusive floor area and a purchase price of 600 million won or less. The clause is confined to non-apartment small housing — multiplex, multi-family and low-rise units — so a compact city apartment bought as a first home falls under the standard 2 million won cap.
| Item | Standard home | Small home (no apartments) |
|---|---|---|
| Price ceiling | 1.2bn won | 600m won |
| Floor area condition | None | Under 60㎡ |
| Relief cap (10k won) | 200 | 300 |
| Applies to apartments | Yes | No |
Which cap applies can be settled before signing. Cross-check three things — registered use on the title and building ledger, the stated exclusive floor area, and the transaction price. For a unit sitting near the 60㎡ line, ledger area and the area quoted at original sale sometimes differ by a decimal, so work from the ledger figure.
What to check
- Your spouse's ownership history — owning and selling before the marriage puts the household out of scope. Your own clean record is not enough
- Whether the price sits near 1.2 billion won — a 10 million won gap in contract price becomes a 2.3 million won gap in tax. Near the line, settle the room to negotiate at the contract stage
- The tenant's remaining lease — if moving in within three months is impossible, confirm from the lease that the remaining term is one year or less
- The three-year restriction — if a job move within three years is plausible, note that letting the place out triggers clawback the moment you do, and build that into the financing plan
- Floor area and registered use — for a non-apartment under 60㎡, check the building ledger area to see whether the 3 million won cap applies
- Where to file — the relief is not automatic. Apply to the tax division of the city or district where the home is located, with a detailed family relations certificate, a resident registration abstract, and the local tax reduction application form