"No Application Needed"... Gangnam District to Proactively Refund Overpaid Acquisition Tax

Comprehensive Review of 576 Cases Reported Using Comparable Property Values

On September 9, Gangnam District in Seoul (District Mayor Kim Hyeon-ki) announced that it would proactively identify and refund cases where taxpayers paid more in acquisition tax after acquiring real estate for free—such as through gifts—based on the value of comparable properties, instead of the actual market value.

Gangnam District Office Building. Provided by Gangnam District Office.

The district will conduct a comprehensive review of 576 cases (reported amount: 19.5 billion won) out of a total of 3,981 reports of free real estate acquisition filed between January 1, 2023, and December 31, 2025, where the acquisition tax was reported based on the value of similar properties. If, as a result of the review, it is found that the recognized market value at the time of reporting is lower, the district office will initiate the refund process ex officio, even without a separate application from the taxpayer.

Since 2023, the acquisition tax for properties acquired for free has been calculated based on the recognized market value reflecting the actual market price, rather than the officially assessed standard value. For apartment complexes, if certain criteria are met—such as the exclusive use area and apartment price being within 5% of each other in the same complex—the tax can be calculated based on the transaction price of similar properties. The issue is that, at the time of reporting, there may be only a limited number of comparable sales transactions. As a result, even if tax was paid based on comparable properties, if a more similar transaction is identified within the statutory period afterward, the taxable base may decrease, causing the taxpayer to have paid more tax than required.

Gangnam District plans to verify eligible cases and review declarations through August and September. In October, the district will register eligible refund recipients in its database and send official notifications. Conversely, if the recognized market value is found to be higher than the amount reported and less tax was paid, the district will guide taxpayers on how to file amended declarations to prevent both additional tax penalties and related complaints.

District Mayor Kim Hyeon-ki stated, "Taxes should be levied accurately, and if excess tax has been paid, we must identify and refund it before the taxpayer requests it." He further emphasized, "We will establish the principle of 'accurate taxation, proactive refunds' in tax administration."

This content was produced with the assistance of AI translation services.