Buying a car in Korea? Beyond the sticker price you pay acquisition tax, mandatory bonds and registration fees — typically 8–10% more.
1. What does it add. On top of the price come acquisition tax + mandatory bonds + registration costs. There are four acquisition tax rates by vehicle type, and the bond is on top — sell it back immediately and you bear only the discount loss, not the face value.
2. What gets missed. Acquisition tax is not levied on the final sticker price — the base is the supply value, VAT removed. That is where most calculations go wrong. And in the reliefs, “exempt” and “deducted” are different words.
3. After you buy. It does not end there — annual automobile tax follows, set by displacement times a per-cc rate and falling 5% a year from year three, stopping at twelve. Paying it upfront earns a discount.
| Vehicle price | 0 |
| Acquisition tax | 0 |
| Discount | 0 |
| Mandatory bond | 0 |
| Registration, plates approx. | 0 |
| Total extra cost | 0 |
Vehicle price should be the final sale price including VAT and excise tax. Bond rates and discount rates vary by region and time. Confirm with your dealer or local office.
What do you pay on top of the price
1. Acquisition tax (the big one)
| Type | Rate |
|---|---|
| Passenger car | 7% |
| Light car (under 1000cc) | 4% + discount |
| Van / truck | 5% |
On a ₩30M car, acquisition tax alone is ₩2.1 million.
2. Mandatory bonds
To register a vehicle you must buy regional development bonds — 5–20% of the vehicle price, depending on engine size and region.
Two choices with the bond:
- Sell immediately — you only lose the discount (~8%). Most people do this
- Hold — pay face value, get it back at maturity (5–7 years)
3. Registration and plates
Stamps, fees, and plates run about ₩100,000.
What is acquisition tax actually levied on
The Ministry of Government Legislation's Easy Law service carries a worked example the government wrote itself: a ₩20,000,000 factory price, under 2,000cc passenger car (page dated 15 June 2026).
| Step | Item | Calculation | Amount |
|---|---|---|---|
| ① | Individual consumption tax | ₩20.0M × 5% | ₩1,000,000 |
| ② | Education tax | the above × 30% | ₩300,000 |
| — | Subtotal | 20.0 + 1.0 + 0.3 | ₩21,300,000 |
| ③ | VAT | subtotal × 10% | ₩2,130,000 |
| — | Total purchase price | 21.3 + 2.13 | ₩23,430,000 |
| ④ | Acquisition tax | 7% of ₩21.3M, VAT excluded | ₩1,490,000 |
Row ④ is the one that matters. The text says “7% of ₩21,300,000, the sale price excluding VAT.” Apply 7% to the ₩23.43M total instead and you get ₩1.64M — ₩149,100 too much (our calculation).
We checked it. 20.0 × 5% = 1.0 / 1.0 × 30% = 0.3 / 21.3 × 10% = 2.13 / 21.3 × 7% = ₩1,491,000. That matches the published ₩1.49M. The four taxes total ₩4.92M, or 24.6% of the factory price (our calculation).
What rate applies to my vehicle
| Category | Rate | Note |
|---|---|---|
| Non-commercial passenger car | 7% | 4% for light cars |
| Motorcycles up to 125cc or 12kW | 2% | — |
| Other vehicles — non-commercial | 5% | 4% for light cars |
| Other vehicles — commercial | 4% | — |
| Anything else | 2% | — |
Registration tax was folded into acquisition tax in 2011, the source notes — budgeting for both double-counts. Property acquisition tax is covered separately in our acquisition tax article.
Light cars skip the consumption tax entirely. Per the source, “light vehicles are excluded from individual consumption tax”, so steps ① and ② are zero and acquisition tax is 4%, not 7%.
How much relief do you actually get
| Who | Source wording | Until |
|---|---|---|
| Light cars | exempt if the tax is ₩750,000 or less; above that, ₩750,000 deducted | 31 Dec 2027 |
| Hybrids | exempt up to ₩400,000; above that, ₩400,000 deducted | 31 Dec 2024 — ended (not extended) |
| Three or more children under 18 | exempt (passenger cars other than 7–10 seaters: exempt up to ₩1,400,000, above that ₩1,400,000 deducted) | 31 Dec 2027 |
| Two children under 18 | 50% reduction (passenger cars other than 7–10 seaters, above ₩1.4M: ₩700,000 deducted) | 31 Dec 2027 |
| Severely disabled persons | acquisition tax or annual vehicle tax, one vehicle, whichever is claimed first | 31 Dec 2027 |
The distinction is easy to miss. A light car with ₩900,000 of acquisition tax is not free — you pay ₩150,000 after the ₩750,000 deduction. Three children caps at ₩1.4M for passenger cars too.
The hybrid relief ended at the end of 2024. Opening the current Restriction of Special Local Taxation Act art. 66 on 23 September 2026, paragraph 3 still reads “until 31 December 2024”, while paragraph 4 (electric cars, ₩1.4M) runs to 31 December 2026 — only the hybrid line was not extended. The calculator above now applies no hybrid relief (the earlier version deducted ₩400,000). The urban-rail bond exemption below is a separate scheme and still covers hybrids to the end of 2026.
Here is what the gap between “exempt” and “deducted” comes to in money.
Do I have to buy the bond
- Light vehicles (excluding motorcycles) need not buy urban railway bonds at all
- Hybrids — exempt up to ₩1,400,000 (registered by 31 December 2026)
- Electric and hydrogen vehicles — exempt up to ₩2,500,000 (same deadline)
- One mobility-purpose vehicle for national merit recipients, independence merit recipients, May 18 injured persons, Agent Orange patients and registered disabled persons is exempt
The bond amounts themselves vary by region and vehicle type and the page carries no table. Only the exemption caps are confirmed.
Which discounts are worth claiming
- Electric vehicles — up to ₩1.4M off acquisition tax + bond reduction (plus separate purchase subsidies)
- Hybrids — acquisition tax relief ended in 2024 (bond exemption only, to end-2026)
- Light cars — up to ₩750,000 off + bond exemption (plus fuel tax refunds, toll discounts)
- Multi-child families, disabled persons, veterans — separate exemptions (check eligibility)
Taxes already in the sticker price. Korean car prices already include excise tax (5%), education tax, and VAT (10%). This calculator shows what you pay on top of the listed price.
What keeps costing after purchase
- Annual automobile tax — based on engine displacement (paid in June and December)
- Under 1000cc: ₩80/cc · Under 1600cc: ₩140/cc · Over 1600cc: ₩200/cc
- Pay the year upfront in January for ~5% off
- Insurance and periodic inspections add to the running cost
Don't budget from the sticker price alone. Acquisition tax, bonds, and registration add roughly 8–10% on top.
The annual tax after purchase turns on engine size, and the band edges are cliffs.
The age discount applies only to non-commercial passenger cars. Local Tax Act art. 127(1)2 sets each half-year instalment for such a car aged 3 years or more at “A/2 − (A/2 × 5/100)(n − 2)”, and says a car older than 12 years is treated as 12 (A is the displacement-based annual tax, n the car’s age). So the cut is 5% in year three, grows 5 points a year and stops at 50% in year twelve (our arithmetic: 5% × (12 − 2) = 50%). Enforcement Decree art. 122(2) counts the age as “tax year − year of the start date + 1” for a start date in January–June; for July–December the first instalment drops the +1. Act as in force 1 July 2026 and decree as in force 1 October 2026, both checked 23 October 2026.
📌 2026 tax reform bill — the individual consumption tax relief for electric and hydrogen cars shrinks from 1 January 2027 (EV cap 3 million → 2 million in 2027 → 1 million in 2028; hydrogen 4 million → 3 million → 1.5 million; ending in 2029 · Ministry release of 3 August, p.27). This calculator treats the excise as already in the sticker price, so its numbers do not change, but EVs delivered from 2027 may carry a higher sticker price (checked 28 September 2026).
One more date besides taxes — a periodic inspection more than 30 days late is fined 40,000 won plus 20,000 won every 3 days, reaching 600,000 won by day 114 (late car inspection).
Bought a used car? Transfer the registration before worrying about tax — a sale must be filed within 15 days, and late filing costs 100,000 won up to 10 days, then 10,000 won a day up to 500,000 won (used-car transfer deadline).
Mind the plate as well as the tax — driving with it covered is fined from 500,000 won even if unintentional, and a bike rack that hides it needs an accessory plate (covered licence plates).
Acquisition tax on buying a car, with light-car, EV and multi-child relief, is in the car acquisition tax calculator.
Sources
- Ministry of Government Legislation — agency source — “Easy Law — What taxes do I pay when buying a car?” (page dated 15 June 2026). Source for the 5% consumption tax, 30% education tax, 10% VAT, four acquisition tax rates, the government's worked example (₩20M becoming ₩23.43M, acquisition tax ₩1.49M), mandatory bonds and their exemptions, and the light-car, hybrid, multi-child and disability reductions — each with its statutory citation attached.
- Seocho-gu, Seoul — local government tax guidance — “Acquisition tax” (checked 30 July 2026), consulted for comparison with property acquisition rates.
- Our own calculation. The ₩4.92M total (24.6% of the factory price), the ₩149,100 overstatement from applying 7% to the gross, and the annual tax and education tax by displacement are ours. Check: the published ₩1.0M / ₩0.3M / ₩2.13M / ₩1.49M all reproduce.
Where to check further
- Bond purchase and discount rates by region. This calculator uses approximate Seoul figures and they differ by local government — confirm with Wetax and the vehicle registration office where you will register.
- This year's caps on EV and hybrid relief. They change with each amendment to art. 66 of the Restriction of Special Local Taxation Act (an earlier version named the wrong act) — before signing, check the National Law Information Center against the relief lines on the dealer's quotation.
- Conditions of the multi-child relief. Set by art. 22-2 of the Restriction of Special Local Taxation Act (checked 23 September 2026): children under 18 (per the family register, including adopted and step-children), a vehicle acquired and registered for child-rearing by 31 December 2027, and only the first vehicle claimed — passenger cars, vans of up to 15 seats, trucks of up to 1 tonne and motorcycles up to 250 cc. The ₩1.4M cap applies only to passenger cars that are not 7–10 seaters, so a 7–10 seat car is fully exempt for three children. Relief is refused if either parent already owns a previously relieved vehicle, or the car is co-registered with anyone other than a spouse or child. The ₩1.4M figure in the table and chart is for an ordinary (e.g. five-seat) car.
- Eligibility for disability and veteran relief. These sit in separate statutes we did not open this time — take your documents to the vehicle registration office.
As of July 2026. The rates and worked example are the Easy Law service's own content; the totals and ratios are our arithmetic. Bond purchase amounts vary by region and timing, and exemption rules can change — confirm with your dealer, the district office or WeTax. General information, not tax advice. Ownership tax and prepayment are in our annual vehicle tax article, buying in the US in the US car cost article, and property tax in the property tax calculator.
