Land value increment tax is collected on the total incremental value at the time of the transfer of the title of the land which has previously been set at a certain value. For land that has a Dien Right established, the original land owner (or the Dien Right assignor) must make prepayment of land value increment tax and the said tax paid is refunded without interest when the land is redeemed.

The taxpayers of land value increment tax are as follows:

1. For land transferred with compensation, the original title owner.
2. For land transferred without compensation, the acquired title owner.
3. For land with a Dien Right established, the Dien Right assignor. In the above provisions, "transfer with compensation" means sale-purchase, exchange, government acquisition or requisition at value. 

The tax rates on regular land under the land value increment tax come in 3 classes.

Remarks: 
a= Total amount of Land Value Increment 
b= Originally set land price or the reported value of last transfer (adjusted per consumer price index. )

Reduction tax rate=Original tax rate -[(Original tax rate - Min. tax rate) x reduction ratio]

1.If held formore than 20 years, thereduction ratio is 20%

• 1-1Class 2 tax rate: 28%=30%-[(30%-20%) x 20%] and the original accumulative difference 10% isreduced to be 8% at the same time

• 1-2Class 3 tax rate: 36%=40%-[(40%-20%) x 20%] and the original accumulative difference 30% isreduced to be 24% at the same time

2.If held formore than 30 years, thereduction ratio is 30% 

• 2-1 Class 2 tax rate: 27%=30%-[(30%-20%) x 30%] and the original accumulative difference 10% isreduced to be 7% at the same time

• 2-2 Class 3 tax rate: 34%=40%-[(40%-20%) x 30%] and the original accumulative difference 30% isreduced to be 21% at the same time

3.If held formore than 40 years, thereduction ratio is 40%

• 3-1 Class 2 tax rate: 26%=30%-[(30%-20%) x 40%] and the original accumulative difference 10% isreduced to be 6% at the same time

• 3-2 Class 3 tax rate: 32%=40%-[(40%-20%) x 40%] and the original accumulative difference 30% isreduced to be 18% at the same time 

If the sale of self-use residential land by the title owner satisfies the following conditions, the land value increment tax thereof shall be collected at a privileged rate of 10%.

1. Urban land not exceeding three ares and non-urban land not exceeding seven ares.
2. Either the title owner himself or his spouse (or herself or her spouse), or lineal descendant or ascendant or member of the house entitled to maintenance is living on the land with household registration duly entered.
3. The parcel of land in question has not been rented or used for business purposes in the last full year before transfer.
4. The title owner may apply for and enjoy this privileged rate of land value increment tax only once in his (or her) lifetime. The sale of self-use residential land will not qualify for the above-mentioned privileged rate if the attached building has been completed for less than one year and its value does not exceed 10% of the announced present value of the land.