Venture Enterprise Acquisition Tax 75% Reduction Guide
Venture enterprises receive a 75% acquisition tax reduction when purchasing business-use real estate. This guide explains the conditions, application process, and clawback triggers under the Local Tax Special Treatment Limitation Law.
Venture Enterprise Acquisition Tax 75% Reduction Guide
The acquisition tax on real estate when setting up an office or research facility is no small burden. Acquisition tax amounts to approximately 4% of the property price, soStock Option
Stock purchase rights granted to venture enterprise employees. Up to 200M KRW/year in exercise gains are tax-exempt, with optional separate taxation. acquiring a property worth KRW 1 billion generates KRW 40 million in tax. Venture enterprisesVenture Enterprise
An enterprise certified under the Special Act on Fostering Venture Enterprises, recognized for its technology and growth potential, receiving various tax, financial, and human resource benefits. can receive a 75% reduction on this acquisition tax, meaning only KRW 10 million is payable in the same scenario. This article explains the legal basis, applicable properties, application procedure, and key points to note regarding the acquisition tax reductionAcquisition Tax Reduction
75% reduction in acquisition tax when venture enterprises acquire real estate for direct use. from a practical standpoint.
Legal Basis
Article 58-3 of the Local Tax Special Treatment Limitation Law
The acquisition tax reduction for venture enterprises is stipulated in Article 58-3 of the Local Tax Special Treatment Limitation Law (Special Taxation for Venture Enterprises, etc.). This provision requires the reduction of acquisition tax and property tax on real estate acquired by venture enterprises for their own direct use.
Related Laws
- Act on Special Measures for the Promotion of Venture Businesses
- Industrial Cluster Development and Factory Establishment Act
- Regulations on urban-type factories and knowledge industry centers
Acquisition Tax Reduction Rate
Basic Reduction Rate: 75%
When a venture enterprise acquires real estate meeting the following requirements, it receives a 75% reduction in acquisition tax.
Acquisition Tax Rate Structure (As of 2026)
| Acquisition Type | Basic Rate | Rural Special Tax | Local Education Tax | Total |
|---|---|---|---|---|
| Non-residential real estate (general) | 4% | 0.2% | 0.4% | 4.6% |
| Factory acquisition | 4% | 0.2% | 0.4% | 4.6% |
| Heavy taxation within Seoul metropolitan area | 8% | – | – | – |
With a 75% reduction, the effective acquisition tax rate drops sharply to 1% (4% × 25%) of the basic 4% rate. However, since the rural special tax and local education tax may be excluded from the reduction, individual confirmation is required.
Calculation Examples
Case: Venture enterprise acquiring an office worth KRW 300 million
- Acquisition tax (4%): KRW 12,000,000
- 75% reduction: KRW 9,000,000 reduction
- Actual acquisition tax payable: KRW 3,000,000
Case: Acquisition of a research institute building worth KRW 500 million
- Acquisition tax (4%): KRW 20,000,000
- 75% reduction: KRW 15,000,000 reduction
- Actual acquisition tax payable: KRW 5,000,000
Applicable Properties
Properties Eligible for Reduction
The 75% acquisition tax reduction applies to the following types of real estate:
1. Real estate within venture enterprise cluster facilities (venture buildings) - Venture enterprise cluster facilities designated by the Minister of SMEs and Startups - Areas such as Teheran-ro in Gangnam, Guro Digital Complex, Pangyo Techno Valley, etc. - Offices, research institutes, manufacturing facilities, etc. within the cluster
2. Real estate within industrial complexes - National industrial complexes, general industrial complexes, urban advanced industrial complexes, etc. - Industrial complexes designated under the Industrial Cluster Development Act
3. Business-use real estate for early-stage companies - Real estate acquired for direct business use within 4 years of founding - Applicable regardless of region
Properties Excluded from Reduction
The following properties are excluded from the reduction:
- Residential real estate: Properties for the residence of the CEO or executives/employees
- Investment real estate: Properties acquired for investment rather than business purposes
- Rental real estate: Properties acquired with the intent to lease to third parties
- Facilities unrelated to operations: Entertainment facilities (condominiums, golf courses, etc.)
Relationship with Property Tax ReductionProperty Tax Reduction
Property tax reduction for venture enterprises located in venture cluster facilities.
In addition to the acquisition tax reduction, venture enterprises also receive a property tax reduction.
Property Tax Reduction Rate
- Generally 50% reduction on property tax for 5 years after acquisition
- 37.5–50% reduction for real estate within venture enterprise cluster facilities
Differences Between Acquisition Tax and Property Tax Reductions
| Item | Acquisition Tax | Property Tax |
|---|---|---|
| Reduction rate | 75% | 37.5–50% |
| Payment timing | One-time at acquisition | Annual payment |
| Application timing | At time of acquisition | Based on June 1 each year |
| Applicable period | One-time at acquisition | During certification period |
Separate Treatment of Land Property Tax
Building property tax and land property tax are calculated separately. Property tax on business-use land of venture enterprises may also be eligible for reduction, but the reduction rate varies depending on the type of land (general aggregate, separate aggregate).
Application Procedure
Step 1: Preparation Before Acquisition
Confirm the following before entering into an acquisition contract: - Confirm whether the property to be acquired is eligible for reduction - Confirm that the purpose of acquisition is for direct business use - Confirm the validity period of the venture enterprise certification
Step 2: Filing the Acquisition Tax Return
The acquisition tax return deadline is within 60 days of the acquisition date. However, if you intend to register or record, you must file and pay before registration.
Step 3: Prepare Documents for the Reduction Application
List of required documents: 1. Acquisition tax reduction application form (Appendix form under the Enforcement Rules of the Local Tax Special Treatment Limitation Law) 2. Venture enterprise confirmation certificate (issued within the validity period) 3. Real estate acquisition-related contract (purchase agreement or sales agreement) 4. Business use plan (explaining what business the property will be used for) 5. Corporate registry certificate (for legal entities)
Step 4: Submit the Application
- Submission destination: Tax department of the local government with jurisdiction over the property
- Submission method: In-person or online (Wetax, wetax.go.kr)
- Processing period: Approximately 2–4 weeks after submission (varies by local government)
Step 5: Reduction Decision and Payment
Once the reduction is determined, pay the acquisition tax minus the reduced amount. If the full amount has already been paid, a refund application may be filed.
Clawback Triggers After Reduction
If any of the following circumstances arise after receiving the acquisition tax reduction, the full amount of the reduced tax will be recouped. In addition to the principal tax, penalty taxes may also be assessed.
Main Clawback Triggers
1. Change of Use (within 5 years of acquisition date) - Changing business-use property to residential use - Converting to a purpose other than business operations - Exception: Change of use due to unavoidable circumstances (fire, flood, etc.)
2. Transfer to a Third Party (within 5 years of acquisition date) - Selling the reduced property to a third party - Exception: Transfer to another venture enterprise may be permitted in some cases
3. Lease to a Third Party (within 5 years of acquisition date) - Leasing even a portion to a third party - Exception: Leasing a portion of the space to another venture enterprise within the same cluster facility may be permitted in some cases
4. Cancellation of Venture Enterprise Certification - If certification is cancelled due to failure to meet requirements - Recoupment is triggered immediately upon cancellation
5. Suspension or Closure of Business - Suspending or closing the business - Exception: Unavoidable circumstances (management crisis, merger, etc.) may be recognized as exceptions
Partial Clawback vs. Full Clawback
In principle, the full amount of the reduced tax is recouped when a clawback trigger occurs. However, in cases of partial change of use, only the tax corresponding to the changed portion may be recouped in some cases.
Application of Heavy Taxation in the Seoul Metropolitan Area
Heavy Taxation on Real Estate Acquisition Within the Seoul Metropolitan Area
When a legal entity acquires real estate within the Seoul metropolitan area (in particular, Seoul, Incheon, and some areas of Gyeonggi), heavy taxation (8%) may apply. However, with the venture enterprise reduction applied, 75% of the heavy tax rate may be reduced.
Acquisition of Space in a Knowledge Industry Center (formerly Apartment-Type Factory)
Separate reduction provisions apply when acquiring a unit in a knowledge industry center. If a venture enterprise directly conducts business in a knowledge industry center, a 50% acquisition tax reduction (under separate provisions) may apply, and whether the venture enterprise reduction and this reduction can be applied concurrently requires individual review.
Practical Checklist
Confirm the following items before receiving the acquisition tax reduction benefit.
Before Signing the Contract - [ ] Inquire in advance with the relevant local government whether the property to be acquired is eligible for the venture enterprise reduction - [ ] Confirm the validity period of the venture enterprise certification (must be valid on the acquisition date) - [ ] Confirm that the intended use of the property is for business
At the Time of Application - [ ] Observe the 60-day filing deadline from the acquisition date - [ ] Prepare and attach all required documents - [ ] Use the latest version of the reduction application form
Post-Reduction Management - [ ] Establish a plan to avoid change of use, transfer, or lease for 5 years after acquisition - [ ] Manage venture enterprise certification renewal (apply before expiry) - [ ] Immediately consult an expert if a clawback trigger occurs
Frequently Asked Questions
Q: Must I be located in a venture enterprise cluster facilityVenture Enterprise Cluster Facility
Facilities designated for venture enterprise tenancy with acquisition tax and property tax reductions. to receive the acquisition tax reduction?
A: No. Being located in a venture enterprise cluster facility is one requirement, but real estate acquired for business use within 4 years of founding may also qualify outside of a cluster facility. Please inquire with the tax department of the relevant local government for exact applicability.
Q: Is it possible to pay the full acquisition tax first and then apply for the reduction later?
A: Yes. After paying the full acquisition tax, a reduction application can be filed in the form of an amended claim, in which case the reduced tax amount will be refunded. However, be careful not to exceed the application deadline (5 years from the acquisition date).
Q: Is employee dormitory real estate eligible for the reduction?
A: No. Dormitories for the residence of employees are not recognized as real estate used directly for the business and are therefore not eligible for the reduction.
Q: Does the reduction apply to additions to an already-acquired building?
A: In the case of an addition, acquisition tax arises on the added portion, and if that portion is used directly for business, it may be eligible for reduction. Even after the addition, the reduction requirements (no change of use within 5 years, etc.) must continue to be observed.
The 75% acquisition tax reduction provides a significant initial cost saving for venture enterprises when securing business space. However, since neglecting post-acquisition management requirements (maintaining the designated use for 5 years) can result in the recoupment of the full reduced tax amount, thorough planning and expert consultation are needed from before the acquisition.