Korea's hometown love donation scheme credits the first 100,000 won in full and 44% of anything between 100,000 and 200,000 won. Donate 200,000 won and you get back 144,000 won in tax credit plus a 60,000-won regional gift — 204,000 won total, or 4,000 won more than you gave.
That arithmetic only became possible in 2026, when the 100,000-to-200,000-won band jumped from 16.5% to 44%. The programme is labelled a donation, but for a donor filing year-end settlement the maths reads like a tax product.
It is also growing fast. As Hankyung reports, last year's total reached 151.46 billion won, up 72.3% year on year, across 1,391,850 donations (up 79.9%). From 65.06 billion won in the first year, 2023, and 87.9 billion won in 2024, the pool has more than doubled in three years. Of the total, 139.7 billion won — 92.2% — went to non-capital regions.
Three bands: 100,000 and 200,000 won are the hinges
The current structure has three steps: 100% up to 100,000 won, 44% from 100,000 to 200,000 won, and 16.5% above that. All three figures already include local income tax, so they land in the refund line as stated.
According to Daegu MBC, the 44% band replaced a 16.5% rate, lifting the credit on a 200,000-won donation from 116,500 won to 144,000 won — a gain of 27,500 won. The band is only 100,000 won wide, so the absolute gain is small, but it flips the direction of the whole calculation.
On top of the credit comes a gift: up to 30% of the donation in local produce or regional vouchers from the recipient municipality. Credit and gift are computed separately, so the real return is the sum of the two. The annual donation ceiling is 20 million won.
One condition governs everything: a tax credit needs assessed tax to offset. If your assessed tax is already zero, the credit line stays empty and only the 30% gift remains.
What comes back at each donation level
The formula is short. Credit = full amount up to 100,000 + (the 100,000–200,000 band × 44%) + (anything above 200,000 × 16.5%). Gift = donation × 30%.
| Donation (KRW) | Tax credit (KRW) | Gift cap (KRW) | Total return (KRW) | Net cost (KRW) |
|---|---|---|---|---|
| 100,000 | 100,000 | 30,000 | 130,000 | -30,000 |
| 150,000 | 122,000 | 45,000 | 167,000 | -17,000 |
| 200,000 | 144,000 | 60,000 | 204,000 | -4,000 |
| 300,000 | 160,500 | 90,000 | 250,500 | 49,500 |
| 500,000 | 193,500 | 150,000 | 343,500 | 156,500 |
| 1,000,000 | 276,000 | 300,000 | 576,000 | 424,000 |
Net cost stays negative — meaning you receive more than you paid — only up to 200,000 won. At 300,000 won the credit is 160,500 won (100,000 + 44,000 + 16,500) plus a 90,000-won gift, leaving 49,500 won of real cost. At one million won, real cost climbs to 424,000 won.
The break-even is 207,000 won
Past 200,000 won, each additional won returns 16.5% as credit plus 30% as gift — 46.5% in total. Below half, so net cost only grows. The exact tipping point: with donation D, total return above 200,000 won is 144,000 + 0.165 × (D − 200,000) + 0.3D, which simplifies to 111,000 + 0.465D. Set that equal to D and D ≈ 207,477 won.
Run the same calculation on the pre-2026 structure (16.5% on everything above 100,000 won) and the return is 83,500 + 0.465D, breaking even at 156,000 won. A single 100,000-won-wide band at 44% pushed the tipping point up by more than 50,000 won.
In a band that returns 46.5% even after the gift, giving more simply means paying more.
From 2027, the region you give to sets the rate
The reform outlined by The Butter replaces the flat national rate with regional tiers, effective for donations made on or after 1 January 2027.
| Recipient region | Up to 100,000 | 100,000–200,000 | Above 200,000 |
|---|---|---|---|
| Current (2026) | 100% | 44% | 16.5% |
| Capital region | 100% | 44% (unchanged) | 16.5% (unchanged) |
| Non-capital metros | 100% | partial increase | 16.5% |
| Other non-capital | 100% | 55% | 16.5% |
| Priority areas | 100% | 55% | 27.5% |
Recomputed for a priority area, the return above 200,000 won becomes 100,000 + 0.575D and the break-even rises to roughly 235,000 won. For other non-capital regions (55% and 16.5%) it is 122,000 + 0.465D, breaking even near 228,000 won. Both push the current 207,000-won line out by 20,000–30,000 won, with the priority-area tier moving furthest because its top band goes from 16.5% to 27.5%. Until the priority-area list is fixed, exact figures stay provisional, but the design intent is clear: push larger sums toward depopulating regions.
Sequencing against other credits matters too. Retirement accounts, where contribution caps and withdrawal conditions travel together, tend to consume assessed tax first — and once assessed tax approaches zero, the hometown donation credit never materialises.
What to watch
- Your own assessed tax — credits above it simply vanish. Check the year-end settlement estimate first
- The priority-area designation list — the 27.5% band decides whether donations above 200,000 won make sense
- How the 30% gift actually arrives — produce versus vouchers changes its practical value
- The pace of growth — whether last year's 72.3% jump came from the higher credit or from better gifts will show in this year's tally
- The residency restriction — donors cannot give to their own registered municipality, and whether that survives the reform