Deed tax is levied on the transfer of title of the real estate through sale, acceptance of Dien Right, exchange, donation, subdivision, or occupancy excluding those where land value increment tax is in effect. As a result, the deed tax is levied only on buildings for dwelling, buildings and other fixtures on land. Deed tax is payable at the time of transfer.
A taxpayer of deed tax is anyone who acquires the title of the real estate through sale, acceptance of Dien Right, exchange, donation, subdivision, or occupancy as described below:
1. Deed tax on a purchase and sale: to be reported and paid by the purchaser.
2. Deed tax on the establishment of a Dien Right: to be reported and paid by the Dien Right assignor.
3. Deed tax on an exchange: to be reported and paid by each party to the exchange on the portion allocated to each party.
4. Deed tax on a donation: to be reported and paid by the recipient.
5. Deed tax on trustship: to be reported and paid by the trustee.
6. Deed tax on a subdivision: to be reported and paid by the partitioner.
7. Deed tax on acquisition by possession: to be reported and paid by the acquirer.
Deed tax is based on the deed price that is prescribed by the Real Estate Appraisal Committee of local governments.
Tax rates are levied as follows:
Type of Deed Tax Rate
Deed tax on purchase and sale 6%
Deed tax on the establishment of a Dien Right 4%
Deed tax on an exchange 2%
Deed tax on donation 6%
Deed tax on subdivision 2%
Deed tax on acquisition by possession 6%
Exemptions and Reductions
1. Transfers of real property due to merger, spin-off or acquisition under the M&A Law shall be tax exempt.
2. Exchanges of real properties as a result of land rezoning are exempted.
3. For a building which has not yet been completed is transferred and the new owner of the building has not received the occupancy permit, such a transaction is not subject to deed tax.
4. Transactions involving building under construction which are transferred from one contractor to another for the purpose of continuing construction and where the second contractor receives an occupancy permit, will not be subject to deed tax.
5. Public housing units constructed by the government or through encouragement of investment are tax exempt.
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