Local taxes consist of provincial, city and county taxes. Provincial taxes include acquisition tax, registration tax, race tax, horse race tax, license tax, community facility tax and local education tax. City or county taxes include inhabitant tax, property tax, mileage tax, automobile tax, agricultural income tax, butchery tax, urban planning tax, and business place tax. At the same time, local education tax is added to taxes such as registration tax and property tax.
TAXES ON REAL ESTATE
■ Acquisition of Real Estate
- Acquisition tax (2% of purchasing price)
- Registration tax (2% of purchasing price)
- Value-added tax (10% of purchasing price for building, and in the case that the building is acquired for business purposes, deduction/reimbursement is possible)
- Local education tax (20% of acquisition tax)
- National housing bonds purchase (in the case of an FDI company, purchase requirement is reduced in proportion to the FDI ratio of the company)
- Acquisition tax: 6% (3 times the standard 2% acquisition tax), when real estate acquisition falls under the following:
a. In the case of acquiring real estate for construction or expansion of factories in the overconcentration control regions in the Seoul metropolitan area (excluding industrial complexes, industrial regions);
b. In the case of construction or expansion of commercial real estate for headquarter or main office of a company in the over-concentration control region;
c. Acquisition tax shall be increased to 10% (5 times the standard 2% acquisition tax) in the case where land or luxurious real estate (luxury villas, weekend villa in the countryside, country clubs) is acquired.
※ Control regions in the Seoul metropolitan area(16 regions)
Seoul, Incheon, Suwon, Anyang, Guri, Goyang, Bucheon, Gwacheon, Gwangmyeong, Uijeongbu, Namyangju (part), Hanam, Seongnam, Uiwang, Gunpo, Siheung (some exceptions).
Persons acquiring the following are liable to be taxed within 30 days of acquisition:
● Real estate (land, buildings),
● Motor vehicles, heavy equipment
● Heavy equipment for the loading and unloading of freight,
● Heavy equipment used in forestry,
● Equipment used in forestry operations,
● Equipment used to service aircraft,
● Equipment used for mining,
● Equipment and boats for fishing,
● Golf club, condominium, and health club memberships.
Generally, the tax base is two percent of the acquisition price. However, a higher tax is levied for the acquisition of the following types of properties:
A Registration tax is levied when registering particulars concerning acquisition, transfer, alteration, or lapse of property rights or other titles in the official registry book. It should be paid before business registration and the tax rate is as follows. Registration tax rates for corporations moving into the Overpopulation Control Zone from a Non- Overpopulation Control Zone shall be levied three times the rates given above. However, for the following lines of business whose need to be at such a location is justified, heavy taxation shall not be applied.