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Multiple-Household Tax Law Exceptions

Posted January. 03, 2006 03:04,   


According to the Ministry of Finance and Economy’s latest additions to the August 31 Real Estate Reform Law, people who merge their households because of marriage or to support their parents will be exempt from aggregate household taxes for two years. Living spaces used as day care centers will also be exempt from the consolidated real estate tax.

The real estate reform law passed the legislature late last year.

According to the law, when a household member owns houses whose market values add up to 600 million won or more, a consolidated real estate tax is levied, with some exceptions.

When a home-owning single person gets married or moves into his parents’ home in order to support them, procuring the ownership of two houses in the process, he or she is exempt from the aggregate taxation.

Also, city approved in-home day care centers that have been in business for five years are exempt from the consolidated real estate tax. So far, only dedicated day care facilities are exempt from the consolidated tax and property tax.

The government also made an exception in its decision to levy a 50 percent transfer profit tax on a people that own or hold occupation rights to two or more homes.

When a person sells a house in one year after acquiring occupation rights, he or she is exempt from the tax.

Heavy transfer taxes on “one household-two home” owners apply to metropolitan home worth more than 100 million won and non-metropolitan home worth more than 300 million won. “One household-two home” owners in other areas gets lower tax rates.

Chang-Won Kim legman@donga.com changkim@donga.com