Seoul, South Korea – The South Korean government has announced a comprehensive stimulus package aimed at revitalizing the domestic economy and easing the financial burden on households. The plan, outlined in the 2025 Economic Policy Direction, focuses on boosting consumption through tax breaks and subsidies.

Automotive and Appliance Incentives

To stimulate the purchase of durable goods, the government is offering significant tax breaks on automobiles, electric vehicles, and appliances. New car buyers can enjoy a 30% reduction in acquisition tax for vehicles purchased between January and June, potentially saving up to 1 million won. Additional tax breaks are also available for those replacing old vehicles.

Electric vehicle subsidies have been extended, with buyers eligible for up to 5.8 million won for larger models and 5.3 million won for smaller ones, depending on the vehicle's price and specifications.

To alleviate the financial burden on low-income households, the government is increasing rebates for purchasing energy-efficient appliances. Individuals with disabilities, veterans, and those receiving basic livelihood benefits can now receive up to a 30% rebate, while multi-child families are eligible for a 15% rebate.

Housing and Employment Support

The government is also introducing measures to reduce housing costs and support employment. Dual-income couples living separately will be eligible for individual rental tax deductions, up to a certain limit. Additionally, the government is expanding the supply of public rental housing for small and medium-sized enterprise employees and increasing job security for workers in the root industry.

To encourage homeownership, the government is expanding the scope of income tax deductions for mortgage interest payments. Furthermore, the property tax exemption threshold for low-value residential properties in rural areas has been increased.

Tourism and Investment

To stimulate domestic tourism, the government is offering travel vouchers and expanding the "vacation support program" for employees of small and medium-sized enterprises. The program provides financial support for domestic travel.

To encourage investment and job creation, the government is offering tax incentives to companies that increase wages.

Financial Support

The government is also making it easier for individuals to save and invest by relaxing restrictions on Individual Savings Accounts (ISAs). Individuals can now open multiple ISA accounts, allowing for greater flexibility in investment strategies.

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