Korean Gift Acquisition Tax Calculator

Receiving a home for free still costs two taxes: gift tax, a national tax on the assets you received, and acquisition tax, a local tax on the fact that you acquired real estate. This calculator handles the second one. Enter the recognised market value, the officially assessed value, whether the home is in a regulated zone, who is giving to whom, and the floor area, and it returns the acquisition tax together with the local education tax and rural special tax that ride on it.

Asking for two values is the whole point. The tax base is the recognised market value, but the ₩300 million line that decides whether the 12% heavy rate applies is measured on the officially assessed value, the government's published figure. The two are usually far apart. Feed one number into both tests and the rate comes out wrong.

A child about to receive a home from a parent, a spouse transferring title, and a parent planning a gift. People tend to research gift tax in advance but only hear the acquisition tax figure at the registry office. This is for anyone who needs to know how much cash the registration will take before they get there.

Families with a home in a regulated zone especially need to run it first. When the heavy rate bites, the acquisition tax rate more than triples and the difference runs into hundreds of millions of won. Just as often, someone braces for the heavy rate and finds that the single-home family exemption brings them back to the standard rate. Either way, find out before registering.

The standard rate for an acquisition without payment is 3.5% under 지방세법 제11조제1항제2호, or 2.8% for a non-profit body. The heavy rate comes from 제13조의2제2항 and 같은 법 시행령 제28조의6: a home in a regulated zone with an assessed value of ₩300 million or more is charged 12%, unless it is a home owned by a single-home household passing to a spouse or lineal relative. All three conditions must hold for the heavy rate; if any one fails, the standard rate applies.

The sequence is as follows. First, the heavy-rate test is run on the assessed value to fix the acquisition tax rate. Then the recognised market value is taken as the tax base and multiplied by that rate. Local education tax is 20% of the standard rate less the 2% heavy base rate, which gives 0.3% at the standard rate and a fixed 0.4% under the heavy rate. Rural special tax is nil at 85㎡ or less and 0.2% above that. The three added together is what you pay at registration.

Take an apartment of 85㎡ or less in a regulated zone, recognised market value ₩800 million, assessed value ₩550 million, given by a parent who owns several homes to a child. It is in a regulated zone, the assessed value is above ₩300 million, and the single-home exemption does not apply, so it is the heavy rate. Acquisition tax is 12% of ₩800 million, or ₩96 million, plus 0.4% local education tax of ₩3.2 million, for ₩99.2 million. No rural special tax, because the floor area is small.

If the same home is given by a parent whose household owns only that one home, the exemption applies and the standard rate governs: 3.5% of ₩800 million is ₩28 million, plus 0.3% local education tax of ₩2.4 million, for ₩30.4 million. How many homes the parent owns is the single fact that moves the bill by ₩68.8 million.

The most common is running the heavy-rate test on the market value or a valuation. The decree says assessed value, plainly. A home whose market value is well over ₩300 million is not caught if its assessed value sits below the line. The reverse error also happens: using the assessed value as the tax base. The base for an acquisition without payment is the recognised market value, so a figure built on the assessed value understates the tax and leaves you short at the registry.

The second is not knowing the single-home exemption. A parent giving their only home to a child, the most common case of all, is exempt and pays the standard rate, yet people assume 12% and abandon the gift. The exemption needs the giver's household to own a single home and the recipient to be a spouse or lineal relative; a common-law partner does not qualify. The third is stopping at acquisition tax and forgetting gift tax. They are separate taxes and both are due. And an inherited home follows a different rate structure, so do not use this calculator for it.