Korean acquisition tax

The basic acquisition-tax rate is 1% up to ₩600m, before local education tax and any rural development tax.

Two other taxes can apply. 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 the rural development tax on a home over the area limit.

Koreans still call the whole thing 취등록세 (chwi-deung-nok-se), literally “acquisition and registration tax”. The registration tax on property acquisition was folded into acquisition tax in 2011. Registration and license tax can still apply to registrations that do not involve acquisition.

An officetel used as a residence is treated as other real estate for acquisition tax.The basic combined rate is 4.6%: acquisition tax 4%, local education tax 0.4%, and rural development tax 0.2%.

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. Residential use does not change this acquisition-tax classification.

On a ₩500m purchase this is the difference between ₩5,500,000 and ₩23,000,000. That is ₩17,500,000 more in tax for the officetel.

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, with a basic combined acquisition-related tax rate of 4.6%.

For a home, the acquisition-tax rate is 1% at ₩600m or below and 3% above ₩900m. Between those prices it is calculated from the purchase price.

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%.

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. The tax amount still increases with the purchase price.

Tax is one part of the closing costs. Include the agent fee as well.

On a ₩500m home the agent may charge up to ₩2,000,000, plus VAT. You can negotiate a fee within that cap. The seller pays a separate fee under the same cap. 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 also need to be checked with the lender.

Tax plus agent fee alone comes to about ₩7,500,000 on a ₩500m purchase. Allow for the other closing costs listed above as well.

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. This calculator does not apply first-home relief. Ask the district tax office whether a reduction applies to your purchase.