2026 local tax reform proposal announced — first-home acquisition tax relief to be extended to residential officetels, with the cap for young people to be raised to 3 million won
Source material is a Korean government announcement (in Korean).
The '2026 local tax reform proposal' announced by the Ministry of the Interior and Safety on 26 August would extend first-home acquisition tax relief to residential officetels and raise the relief cap for people under 40 from 2 million won to 3 million won; it is a government bill scheduled to be submitted to the National Assembly at the end of October after advance legislative notice from 27 August to 23 September.
Key facts
| Current system | A person acquiring a home of 1.2 billion won or less for value for the first time is exempted from acquisition tax up to a cap of 2 million won |
|---|---|
| Wider scope (proposed) | First-home acquisition tax relief extended from housing to residential officetels |
| Cap for young people (proposed) | Relief cap for a person under 40 acquiring a first home raised from 2 million won to 3 million won |
| Relief applied again (proposed) | First-home relief applied again where a small officetel or small home with an exclusive-use area of 40 square metres or less and a standard market price of 200 million won or less (400 million won or less in the metropolitan area) is disposed of and a home is then acquired; apartments excluded from the small-home category |
| Property tax special rule | The special rule applying a property tax rate 0.05 percentage points below the standard rate to single-home households (1세대 1주택) with a published price of 900 million won or less extended to 2029 |
| Legislative schedule | 27 days of advance legislative notice from 27 August to 23 September, then Ministry of Government Legislation review and a Cabinet decision, with submission to the National Assembly planned for the end of October (amendments to the Framework Act on Local Taxes, the Local Tax Collection Act, the Local Tax Act and the Restriction of Special Local Taxation Act) |
| Enquiries | Ministry of the Interior and Safety, Local Tax Policy Division 044-205-3821 |
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The Ministry of the Interior and Safety announced the '2026 local tax reform proposal' on 26 August. Under the proposal, the scope of first-home acquisition tax relief would be extended from housing to residential officetels, and the acquisition tax relief cap for a person under 40 without a home acquiring a first home would be raised from 2 million won to 3 million won. At present, a person acquiring a home of 1.2 billion won or less for value for the first time can be exempted from acquisition tax up to a cap of 2 million won. First-home relief could also be received again where a person who owned and then disposed of a small officetel or small home with an exclusive-use area of 40 square metres or less and a standard market price of 200 million won or less (400 million won or less in the metropolitan area) subsequently acquires a home, with apartments excluded from the small-home category. The special rule applying a property tax rate 0.05 percentage points below the standard rate to single-home households (1세대 1주택) with a published price of 900 million won or less would be extended to 2029. The proposal is a government bill scheduled to be submitted to the National Assembly at the end of October, after 27 days of advance legislative notice from 27 August to 23 September followed by Ministry of Government Legislation review and a Cabinet decision.
Background — why this change
The proposal was prepared by gathering views from local governments and experts through joint local government discussion sessions on system improvement and integrated screening of local tax relief. The proposal also includes letting the local education tax on tobacco lapse at the end of this year as scheduled and converting it into a local housing welfare tax (지방주거복지세) from 2027. The local housing welfare tax would be paid by tobacco manufacturers and importers at 43.99% of the tobacco consumption tax, amounting to about 1.5 trillion won a year; the Ministry of the Interior and Safety said it adds no further tax burden on the public and would be used as a funding source for residents' housing welfare, such as expanding the supply of public housing led by local governments. The proposal also includes raising the price threshold for heavier acquisition tax on luxury housing from a published price of 900 million won to 1.2 billion won, and expanding local tax relief for businesses in non-metropolitan and population-declining areas and for social and solidarity economy enterprises.
Summaries below are factual notes based on government announcements and primary sources — not evaluations or opinions.
FAQ
Does this apply right away?
No. The announced proposal is a government bill scheduled to be submitted to the National Assembly at the end of October after advance legislative notice from 27 August to 23 September, Ministry of Government Legislation review and a Cabinet decision, and it must go through National Assembly deliberation before it is settled.
What does the relief cap for young people change to?
Under the proposal, the acquisition tax relief cap for a person under 40 acquiring a first home would rise from the current 2 million won to 3 million won.
Would officetels also qualify for first-home relief?
The proposal contains a provision extending first-home acquisition tax relief to residential officetels as well as housing.
How can views be submitted?
The amendment bill can be viewed in the Official Gazette and on the Public Participation Legislation Centre website, and views may be submitted by post, by fax or through the Public Participation Legislation Centre.