Korean acquisition tax

Ask about acquisition tax in Korea and you will be told 1% under ₩600m. That is the headline rate, and it is true as far as it goes.

But two smaller taxes are collected with it. The local education tax is 10% of the acquisition tax, so it adds 0.1%. The rural development tax adds 0.2%, though homes of 85㎡ or less are exempt.

So a ₩500m flat of 84㎡ costs ₩5,500,000, not the ₩5,000,000 the 1% figure suggests. The same flat at 114㎡ costs ₩6,500,000 — the extra ₩1,000,000 is that exemption falling away.

Koreans still call the whole thing 취등록세 (chwi-deung-nok-se), literally “acquisition and registration tax”. The registration tax was folded into the acquisition tax in 2011 — the word outlived the tax.

You can live in an officetel, sleep in it and register it as your address. For acquisition tax it is still taxed like a shop, at 4.6%.

The home rates of 1–3% apply only to a building the register calls a house. Article 11 of the Local Tax Act ties the rate to the building register, and officetels are built as 업무시설 — business facilities. Nothing about how you use it changes that.

On a ₩500m purchase this is the difference between ₩5,500,000 and ₩23,000,000. That is ₩17,500,000 — enough to matter when you compare an officetel with a small apartment.

The 85㎡ exemption does not help either, because it belongs to homes. Check the building register (건축물대장), not the listing. A 도시형생활주택 is legally a house and gets the home rates; a 생활숙박시설 is lodging and gets 4.6%.

Below ₩600m the rate is 1%. Above ₩900m it is 3%. In between it is not a step but a slope.

The law writes the formula out: (price ÷ ₩300m × 2 − 3) ÷ 100, rounded to four decimal places. A ₩700m home lands on 1.67%, a ₩800m home on 2.33%.

This matters because it used to be a cliff. Before 2020, crossing ₩600m by a single won jumped your rate from 1% to 2%. Now nothing happens at the boundary — the rate rises smoothly from 1% at ₩600m to 3% at ₩900m.

Above ₩900m the rate stops climbing. A ₩1bn home and a ₩3bn home pay the same 3% — 3.3% once the education tax is added. Only the amount grows.

Do not confuse this with the agent’s commission, which does keep stepping up — at ₩600m, ₩900m, ₩1.2bn and ₩1.5bn. Two different schedules on the same purchase.

The tax is the biggest single line but not the only one. Budget for the agent first.

On a ₩500m home the agent may charge up to ₩2,000,000, plus VAT. That is a cap, not a price — it is negotiable within it. And the seller pays the same amount separately; you are not splitting one fee. Our pyeong converter is useful when you are comparing the flats themselves.

Then there is the judicial scrivener (법무사) if you have someone handle the registration, a national housing bond purchase (usually bought and immediately resold, so you bear only the spread), and stamp duty. If you take a mortgage, the lien registration costs money too, though many banks now absorb it.

Tax plus agent fee alone comes to about ₩7,500,000 on a ₩500m purchase. Plan your closing cash around that, not around the tax figure.

Within 60 days of the balance payment. In practice you pay it on the day you register the transfer, because the registry office wants the tax receipt before it will record you as owner.

You pay the city, county or district office where the property is, not the National Tax Service — acquisition tax is a local tax. Wetax handles it online.

If a scrivener handles your registration they file the tax for you. When their quote arrives, check the tax line against the number above — the tax is fixed by law, the fee is not.

Late filing adds a penalty. There is also a first-home reduction with income and price conditions that change, so ask the district tax office whether you qualify. This calculator does not assume it.