As the crisis of population decline becomes serious due to the low birth rate, many measures are being taken to encourage childbirth.
However, there is a limitation in that various measures are limited to those who actually enjoy benefits due to strict income and asset conditions.
However, the conditions for the neonatal housing acquisition tax reduction, which will take effect this year in 2024, are less demanding than other benefits, so many people may receive support.
Let me summarize what kind of policy it is. jasminevista.com
5 million won reduction in neonatal acquisition tax
The Ministry of Public Administration and Security, which has jurisdiction over acquisition tax, introduced housing assistance for households born as one of the policies that will change in 2024.
If you look at the big thing, the housing acquisition tax for one household and one homeowner with the purpose of living with their born children will be reduced to a limit of 5 million won.
Let me go into a little bit more detail.
the housing acquisition tax rate
Currently, the housing acquisition tax rate in Korea is 1-3% based on one household and one house.
1% is applied to houses with less than 600 million won, 3% is applied to houses with more than 900 million won, and the acquisition tax rate of 1% to 3% is set depending on the acquisition price for houses with more than 600 million won to less than 900 million won.
See TAX watch article
As the number of houses increases, the tax rate increases, so it can be applied up to 12%.
Local education tax (1/10 of acquisition tax) and special tax on farming and fishing villages (0.2% of the housing acquisition price, non-taxable for houses under 85㎥) will be added to this.
Based on this, if you bought a 1 billion won house based on one household and one house, you will pay 35 million won in acquisition tax.
I’ve only bought a house, but it’s bound to be a huge burden to pay this acquisition tax.
Target, conditions, and limits for neonatal acquisition tax reduction
As one of the policies to encourage childbirth, this policy to reduce the burden of housing acquisition tax was newly implemented in 2024 this year.
It was newly established as the Restriction of Special Local Taxation Act on January 1, 2024, and we will examine the related conditions, targets, and limits in detail based on the contents of the law.
Article 36-5 of the Restriction of Special Local Taxation Act, which deals with the reduction of acquisition tax for newborns, is as follows.
Article 36-5 (Equisition tax reduction or exemption for the acquisition of housing for childbirth and rearing) ① Where a parent (including a single mother or unmarried woman) who gave birth to a child by December 31, 2025 acquires a house worth less than 1.2 billion won (including a case of acquiring a house within one year before the date of childbirth) within five years from the date of childbirth (including a case of acquiring a house within one year before the date of childbirth), the acquisition tax shall be exempted if the calculated tax is less than 5 million won, and if it exceeds 5 million won, 5 million won shall be deducted from the calculated tax amount.
1. The family relationship register will confirm the birth of the child
2. The relevant house shall correspond to one house for one household prescribed by Presidential Decree (including cases where the house becomes one house for one household within three months from the date of acquisition of the house)
② Where a person who has been reduced or exempted from acquisition tax pursuant to paragraph (1) falls under any of the following, the reduced or exempted acquisition tax shall be collected.
1. Where he/she does not start living with the relevant child within three months from the date of acquisition of the house (if acquired before the date of childbirth), without justifiable grounds prescribed by Presidential Decree
2. Where a house is sold or donated (excluding the case of selling or donating shares to a spouse) or used for other purposes (including rental) while the period of permanent residence with the relevant child is less than three years
Let me interpret the contents of the statute one by one.
(1) Target
– Parents who gave birth to their children by December 31, 2025 (the Family Relations Register confirms the child’s birth)
– Where a house is acquired within 5 years from the date of birth or within 1 year before the date of birth
– Acquisition of one house with a value of less than 1.2 billion won at the time of acquisition (including cases where one house becomes one house for one household within three months from the date of acquisition of the house)
(2) a reduction or exemption
– If the acquisition tax amount is less than 5 million won, the entire acquisition tax is exempted, and if it exceeds 5 million won, 5 million won is deducted
※ Local education taxes linked to acquisition tax are also exempted, so the actual reduction effect is 5.5 million won
As a result, all acquisition taxes will be reduced until a house less than 85㎥ is purchased for 500 million won.
(3) In case of additional collection
If the following cases occur, the reduced acquisition tax will be collected.
– In the case where the child and the relevant child are not permanently residing within three months from the date of acquisition of the house without justifiable grounds (i.e., gap investment, etc. is not possible)
– Where a house is sold or donated or used for other purposes, including rental, while the period of permanent residence with the relevant child is less than three years
In other words, you must actually live in a house that has received an acquisition tax reduction for at least three years.
This part can be easy to miss, so please be sure to give it to me.
While the government has come up with a number of measures to encourage childbirth, they often do not benefit from asset and income conditions. (A case in point is a special loan for newborns.)
However, the neonatal acquisition tax reduction is a more useful option than other policies, as anyone can receive support without asset or income conditions as long as the housing acquisition price is met.
If you are preparing to give birth and buy a house, please take care of the system.
[Source] Newborn acquisition tax of KRW 5 million, eligible conditions (acquisition of a house for raising childbirth) |Writer Someday Rich