Acquisition tax on a residential purchase in Korea is 1% at or below 600 million won and 3% above 900 million won. The band between them is not a staircase but a straight line. The formula published by Korea's Easy Law information service is (price in units of 100 million won × 2/3 − 3) ÷ 100, which puts a 700 million won home at 1.67%. On top of that sit a local education tax and, for larger units, a rural development surtax — and first-time buyers subtract 2 million won.
After the balance payment itself, acquisition tax is the largest single cash outlay at closing. Because those three components are each calculated on a different basis, budgeting from the headline rate alone will miss the real bill. That is especially true for units above the 85 square metre threshold.
How the Rate Between 600 and 900 Million Is Derived
Before 2020, exceeding 600 million won by a single won pushed the rate from 1% to 2% in one jump — a 6 million won difference between a price of 600,000,000 and 600,000,001. That cliff was removed by connecting the 600–900 million band with a single straight line.
Take the price expressed in units of 100 million won, multiply by 2/3, subtract 3. At 600 million: 6 × 2/3 − 3 = 1.00%. At 900 million: 9 × 2/3 − 3 = 3.00%. The two ends meet the flat bands exactly. A price of 750 million lands on precisely 2.00%. Rates that run to many decimal places are rounded to four.
What It Actually Costs at Each Price
The acquisition tax is not the whole bill. As Ilgan NTN explains, the local education tax on a residential purchase is 20% of an amount computed at half the acquisition tax rate — which works out to one tenth of the acquisition tax rate. The rural development surtax does not apply to units of 85 square metres or less; above that it is 10% of the amount at a 2% standard rate, or 0.2% of the purchase price.
Calculated across price points, the three components split as follows. Figures are in units of 10,000 won.
| Purchase price | Rate (%) | Acquisition tax | Local education tax | Rural surtax | Total, ≤85㎡ | Total, >85㎡ |
|---|---|---|---|---|---|---|
| 500m won | 1.00 | 500 | 50 | 100 | 550 | 650 |
| 600m won | 1.00 | 600 | 60 | 120 | 660 | 780 |
| 700m won | 1.67 | 1,167 | 117 | 140 | 1,284 | 1,424 |
| 750m won | 2.00 | 1,500 | 150 | 150 | 1,650 | 1,800 |
| 800m won | 2.33 | 1,867 | 187 | 160 | 2,054 | 2,214 |
| 900m won | 3.00 | 2,700 | 270 | 180 | 2,970 | 3,150 |
| 1bn won | 3.00 | 3,000 | 300 | 200 | 3,300 | 3,500 |
Two points deserve attention. First, moving from 600 to 700 million won — a 17% increase in price — nearly doubles the acquisition tax, from 6 million to 11.67 million won, a 94% jump. That is the band where the rate itself climbs alongside the price. Second, the 85 square metre threshold costs an extra 1 million won at a 500 million purchase and 2 million won at 1 billion. Given that an exclusive area of 84㎡ and a supply area of 34 pyeong describe the same apartment, this is a real consideration when choosing a unit sitting near the national housing size line.
Acquisition tax is not a tax you memorise a rate table for. It is a tax of thresholds — 600 million, 900 million, 85 square metres, 1.2 billion. Four lines set the number.
How the First-Home Deduction Works
Article 36-3 of the Restriction of Special Local Taxation Act covers the purchase of a home priced at 1.2 billion won or less, acquired for consideration and for the buyer's own residence. The mechanism is simple: if the computed tax is 2 million won or less it is waived entirely; above that, 2 million won is subtracted. It is a fixed deduction, not a percentage.
| Purchase price | Computed tax (10k won) | Deduction (10k won) | Tax payable (10k won) | Effective relief (%) |
|---|---|---|---|---|
| 200m won | 200 | 200 | 0 | 100 |
| 300m won | 300 | 200 | 100 | 67 |
| 500m won | 500 | 200 | 300 | 40 |
| 700m won | 1,167 | 200 | 967 | 17 |
| 900m won | 2,700 | 200 | 2,500 | 7 |
| 1.2bn won | 3,600 | 200 | 3,400 | 6 |
| Above 1.2bn | — | 0 | Full amount | 0 |
Because the deduction is fixed, its felt value falls away sharply as prices rise. A 200 million won home pays nothing; a 900 million won home sees only 7% shaved off. Exceed 1.2 billion by a single won and the relief disappears entirely, leaving the full 36 million won payable — a 2 million won swing across that line.
What the statute relieves is the acquisition tax itself. Local education tax and the rural surtax are separate levies and must be added on top of the amounts above.
What Claws the Relief Back
The deduction is conditional after the fact, not final on the day. The statute and guidance from Geumcheon District Office point to the same triggers.
- Failure to occupy — the purchase must be for the buyer's own residence. Not taking up permanent residence removes eligibility.
- Disposal within three years — selling or gifting within three years of acquisition triggers recovery of the relieved amount.
- Change of use within three years — letting the property out or putting it to any other use has the same effect.
- Household requirement — neither the buyer nor their spouse may have previously owned a home. Any prior ownership disqualifies the claim.
The relief runs until 31 December 2028. It is a separate scheme from the first-time buyer special supply in the cheongyak housing subscription system, with different eligibility rules — winning a special supply allocation does not automatically carry the tax relief with it.
Things to Verify
- The 60-day filing deadline — the return and payment are due to the head of the relevant local authority within 60 days of acquisition. A relief claim must be filed within the same window.
- Registered exclusive area — the 85㎡ test uses the exclusive area on the register and building ledger, not the marketing floor plan. 84.99 and 85.01 fall on opposite sides.
- Basis for the taxable price — for a purchase for consideration, the actual transaction price governs. The published standard value can exceed it, so do not assume the contract figure settles it.
- Counting properties — surcharge rates for multiple owners are assessed at household level. Whether an officetel or a pre-sale right counts toward that total varies by tax and needs checking individually.
- Treatment of the surtaxes — how the local education tax and rural surtax are handled when acquisition tax is relieved should be confirmed with the local tax office. The statute itself speaks only to the acquisition tax.
- The sunset date — relief applies to acquisitions through 31 December 2028, measured by acquisition date (the earlier of balance payment or registration), not contract date.
Sources
- Property purchase — paying the various taxes (Korea Easy Law)
- Restriction of Special Local Taxation Act, Article 36-3 (Korea Law Information Center)
- Local education tax and rural surtax accompany acquisition tax — file and pay together (Ilgan NTN)
- Acquisition tax relief for first-time homebuyers (Geumcheon District Office)