South Korea expands first-time homebuyer tax exemptions to include officetels

South Korea’s Ministry of the Interior and Safety has announced the ‘2026 Local Tax Reform Plan’ to ease housing costs for youth and low-income citizens. A key feature is the expansion of acquisition tax exemptions for first-time homebuyers to include residential officetels, which were previously excluded.

Under the new plan, the acquisition tax exemption limit for individuals under 40 purchasing their first home (valued at 1.2 billion won or less) will increase from 2 million won to 3 million won. To prevent a loss of benefits, those who previously owned and sold small officetels or small houses (under 40㎡) may qualify for the exemption again when purchasing a new home.

Other significant measures include: - Extending the 0.05 percentage point property tax rate reduction for single-homeowners until 2029. - Converting the local education tax derived from tobacco consumption into a ‘Local Housing Welfare Tax’ to fund regional housing support. - Providing tax incentives for public rental housing providers, including a 70% acquisition tax reduction through 2027. - Increasing tax burdens on luxury assets, such as raising the fair market value ratio for membership golf courses from 70% to 100%.

The reform also aims to support regional development by offering tax benefits to social enterprises, cooperatives, and companies returning their overseas operations to South Korea.