The benefit of "acquisition tax exemptions for first-time homebuyers" is expanding to include officetels.

The local education tax portion of the tobacco consumption tax, which is set to expire at the end of this year, will be replaced with a local housing welfare tax.

The Ministry of the Interior and Safety announced the "2026 Local Tax System Revision Plan" containing these measures today (the 26th).

The tax revision is expected to generate an effect of increasing tax revenue by 57.4 billion won while redesigning the local tax expenditure structure.

Legislation notice for the amendment of the Local Tax Basic Act, Local Tax Collection Act, Local Tax Act, and Special Act on Local Tax Exemptions following the tax system revision is scheduled to proceed starting tomorrow.
  According to the revision plan, to reduce housing prices and housing cost burdens, the acquisition tax exemption benefit previously granted to young people purchasing a home for the very first time in their lives will be expanded.

First, the acquisition tax exemption, which was previously applied only to multi-family housing such as apartments, row houses, and multi-household houses, will now also apply to officetels.

The Ministry of the Interior and Safety explained that although officetels have lower purchase preference due to small land shares and heavy cost burdens including taxes and management fees, this measure is intended to strengthen housing support for young adults starting their careers and low-income earners, as officetels serve as a stepping stone for home acquisition as apartment substitutes.

However, to prevent situations where receiving the first-time acquisition tax exemption when buying an officetel results in receiving no benefits when subsequently purchasing an apartment, individuals who have owned and then disposed of small homes or small officetels will be allowed to receive the exemption benefit one more time.

The additional acquisition tax exemption will apply only to homes and officetels with a dedicated area of 40 square meters or less and a standard market value of 200 million won or less (400 million won or less in the Seoul metropolitan area), and benefits cannot be received if the property is an apartment.

The maximum limit for first-time acquisition tax exemptions will also be increased.

The exemption limit is generally 2 million won, but it has been preferentially set to 3 million won for small homes with a dedicated area of 60 square meters or less and a standard market value of 300 million won or less (600 million won or less in the Seoul metropolitan area) as well as homes located in population-declining areas. Young adults under the age of 40 purchasing a home for the first time will now be added to these preferential targets.

An official from the Ministry of the Interior and Safety stated, "We believe this is the most effective and persuasive policy tool under limited local fiscal conditions," and added, "We hope that young adults starting out in society will make the best use of this opportunity to help build a housing ladder."

The local education tax portion of the tobacco consumption tax, which expires at the end of this year, will be converted into a local housing welfare tax.

Because this does not raise the tobacco consumption tax rate, the tax burden will not increase; rather, it is a concept of changing the use of financial resources raised from the tobacco consumption tax that were previously used for the local education tax.

The local education tax portion of the tobacco consumption tax collected by local governments last year amounted to about 1.5 trillion won, and these financial resources will be utilized autonomously by local governments that are well-versed in local circumstances.

The revision plan also includes strengthening support to rapidly supply housing to the middle class and ordinary citizens.

The acquisition tax paid by businesses that contract with public housing operators to supply rental housing when they purchase real estate and construct housing will be reduced by 70% until 2027 and by 50% until 2028.

Property tax exemptions for equity-sharing for-sale housing initially supplied by public housing operators will also be extended until 2029.

Acquisition tax on major renovation costs incurred when converting non-residential facilities into residential facilities will be fully exempted.

In addition, acquisition tax exemption benefits granted when development cooperatives purchase real estate from cash settlement targets will be expanded, and the requirements for acquisition tax exemption benefits available upon the initial comprehensive transfer of rental housing built mandatorily in accordance with redevelopment projects will be eased.

Furthermore, the special exception applying a property tax rate 0.05 percentage points lower for single-home households will be extended by three years until 2029, and the disposal period for previous homes for temporary two-home households will be shortened from three years to two years.

In addition, to prevent "tricks" aimed at avoiding heavy acquisition tax on luxury homes with a public appraisal price of 1.2 billion won or more, common areas will be included in the dedicated area instead of reducing the heavy taxation standard area.

To enhance regional taxation equity, a provision applying standards 50% higher to non-metropolitan areas than to the Seoul metropolitan area was also established through this tax revision.
  The revision plan newly includes provisions to support social solidarity economy organizations such as social enterprises, cooperatives, and village enterprises with acquisition and property tax exemption benefits through member cooperation and democratic management to pursue public interest over profit and innovate local communities.

These benefits will be granted to companies that have been established for less than five years, have total assets of less than 50 million won, or possess low tax-bearing capacity subject to the minimum corporate local income tax rate.

The benefits will be greater for social solidarity economy organizations located in non-metropolitan and population-declining areas.

In addition, provisions were established to reduce the minimum registration license tax by 50% when cooperatives and federations with fewer than 200 members or investment funds of less than 3 billion won increase their capital.

Support to underpin balanced regional development will also be reinforced.

To attract businesses to regional areas, the reduction rates for acquisition and property taxes previously applied to venture business cluster facilities and new technology startup cluster areas will be greater in population-declining areas.

Comparing the Seoul metropolitan area and population-declining areas, the acquisition tax reduction rates are 15% and 50%, respectively, while property tax reduction rates are 15% and 75%.

Tax benefits for cooperative corporations such as the National Agricultural Cooperative Federation and National Federation of Fisheries Cooperatives will also be applied differently depending on the region.

In addition, preferential periods will be extended for measures such as the exemption from heavy acquisition taxation and exclusion from housing counts for homes acquired for private rental purposes in population-declining areas, as well as exemptions from heavy taxation and exclusion from housing counts for acquisition tax incurred when first acquiring unsold local apartments.

The scope of local tax reductions for companies establishing or expanding business workplaces in Opportunity and Development Zones will also be expanded.

Incentives provided to companies returning domestically will also increase.

"Partial return companies," such as companies downsizing overseas workplaces and companies establishing new domestic workplaces instead of maintaining overseas workplaces, will also receive tax support.

In addition, reduction benefits for acquisition and property taxes granted to victims of lease fraud, elderly welfare facilities, and national merit recipients will be extended through 2029.

The revision plan also includes content to rationalize real estate taxes and enhance taxation equity.

To enable businesses to use owned land productively, the building value criterion for separately aggregated targets will be raised from "when the building value is less than 2/100 of the attached land value" to "when it is less than 5/100."

Furthermore, tax benefits will be reduced for lands where construction is delayed to prompt faster development projects, and rates for capital gains-related individual local income tax and corporate local income tax on capital gains from non-business land were increased.

In addition, the fair market value ratio applied to luxurious properties such as membership golf courses and luxury entertainment bars will be raised from 70% to 100%, and restriction grounds were specified to prevent one local government from causing disadvantages to other local governments by reducing local taxes through ordinances.

Minister of the Interior and Safety Yun Ho-jung stated, "This year's local tax system revision plan was prepared to strengthen housing support for young adults and ordinary citizens and to support region-led balanced growth," adding, "We will closely communicate and cooperate with the National Assembly during the legislative discussion process so that the revision plan can be implemented without a hitch."