Recently, the government has levied heavy tax for multiple-home owners and strictly restricts loans tomultiple-home owners and high-priced home owners.

In case of acquiring high priced house ormultiple-home owners additionally inquires house, mortgage is prohibited orlimited. However, when a house is acquired under a name of corporations, thereare no specific limitations.

In this sense, it seems like the policy isdiscriminating individuals against corporations.

There are several countermeasure, such as acquiringby registering business as housing rental business or acquiring a house under acompany's name.

According to recent media reports, about8~9% of total home sales were acquired by companies.

The purpose of the article is to review taxissues when a company is acquiring a house.

Acquisition tax

Acquisition tax is levied when acquiring house.

Generally, same acquisition tax is appliedwhen a company acquires a house or an individual acquires a house. However, ifa company with less than five years of history acquires house in metropolitanarea, tax is tripled. Therefore, in order to acquire a house under a company'sname, it is important to review whether a company is subjected to heavy taxburden. If it is profitable for a company even after paying the tax, thecompany can choose to acquire a house.

The example of tax rate is as follows.

In case a company of 5 years of history anda company of less than 5 years of history acquires a house, 

 * A company over 5 years of history:1billion KRW * 3.3% = 33million KRW

* A company less than 5 years of history:1billion KRW * 7.9% = 79million KRW