Proposed Bill to Exempt Acquisition Tax on Divorce Property Divisions

An initiative is to be submitted to the National Assembly this week to revise local tax laws. The main points of this proposal are to exempt the acquisition tax for properties divided between a divorcing couple and to reduce the registration tax to as low as 0.3 percent.

Assemblyman Jung Sung-ho of the ruling Uri Party, representing Dongducheon and Yanju of Gyeonggi Province, said on October 6 that he will be submitting this proposal to the National Assembly on October 7 or 8 after a final tuning with other interest groups such as civic groups for women.

Currently, two percent of acquisition tax and 1.5 percent of registration tax are levied when properties under the husband’s name are handed to the wife.

Under the current law, six million won of acquisition tax and 4.5 million won of registration tax are levied when making a nominal transfer of a 300-million-won apartment from the husband’s name to his wife’s name, making it a total of 10.5 million won to be paid as taxes. When the law is revised, however, the couple will only have to pay 900,000 won for the registration tax.

This revision proposal will work as a precursor to the implementation of a “common property system for married couples” that the Uri Party, the Grand National Party, the Democratic Labor Party, and the New Millennium Democratic Party set out as their campaign pledge for the 17th general election.

The common property system for married couples is a system where any properties obtained after the marriage are managed and disposed of by both members of the marriage, with equal rights (joint ownership) prevailing regardless of the amount of contribution made by each member of the couple to obtain the property.

There is no set legal clause that defines how the properties of a divorcing couple should be divided. The precedent so far for divorces done through legal proceedings gives 30 percent of property to housewives and 50 percent to working wives.

jin0619@donga.com