A special bill designed to speed up the acquisition of nuclear-powered submarines as a national strategic project cleared the Cabinet on the 29th. The move follows an agreement between President Lee Jae-myung and U.S. President Donald Trump at their summit to accelerate the submarine program, and adds institutional support through legislation.
At the Cabinet meeting held at the Blue House and chaired by Lee, the government deliberated on and approved the bill, titled the Special Act on Nuclear-Powered Submarine Projects Including Acquisition, Operation and Safety Management, along with 14 presidential decree proposals and two general agenda items.
With the bill's approval, the government plans to designate nuclear-powered submarines as a new national strategic asset for South Korea and to build a standalone legal framework combining military nuclear power and weapons systems, replacing the current arrangement split between the Defense Acquisition Program Act and the Nuclear Safety Act.
The special act comprehensively covers exceptions for the acquisition and operation of nuclear-powered submarines as well as safety management standards for military nuclear power. Because the vessels are powered by nuclear reactors, the bill explicitly cites not only safety management but also the need to secure trust with the United States and the wider international community, including the International Atomic Energy Agency (IAEA), as key considerations behind the legislation.
The government plans to submit the bill approved at the Cabinet meeting to the National Assembly, where it will then undergo deliberation. If passed, it would mark the first domestic legal basis for the nuclear submarine program. The government is aiming for enactment within the year.
The meeting also took up legislation related to investment in the United States. An amendment to the enforcement decree of the Inheritance and Gift Tax Act was approved, exempting from gift tax any assets donated to the Korea-U.S. Strategic Investment Fund set up at the Korea-U.S. Strategic Investment Corporation to support strategic investment between the two countries.
Amendments to the enforcement decrees of the Income Tax Act, the Comprehensive Real Estate Holding Tax Act and the Local Tax Act were also deliberated and approved. Under the comprehensive real estate holding tax decree, when a household that owns one home in a regulated zone acquires a new home in the same regulated zone and temporarily becomes a two-home owner, the period during which it is still treated as a single-home household will be shortened to two years from the current three.
Tax support for unsold homes outside the Seoul metropolitan area, by contrast, will be extended. For completed but unsold homes acquired outside the capital region, exemptions from the heavier capital gains tax on multiple-home owners and from the home count under the comprehensive real estate holding tax will run through the end of 2027, a one-year extension from the end of 2026. An exemption from additional corporate tax for corporate restructuring real estate investment trusts that acquire completed but unsold homes in provincial areas will also be extended to the end of 2027.
To protect existing tenants, if a lease is renewed with a tenant for up to two years before an application for land transaction approval is filed, the owner's mandatory residency period will be counted from the expiration of the renewed lease. The aim is to ease the problem of transactions being blocked simply because a tenant is living in the property, while still guaranteeing the existing tenant's right to remain.
To stabilize supply chains, an amendment to the enforcement decree of the Framework Act on Supply Chain Stabilization Support for Economic Security was also approved, adding the minister of planning and budget to the Supply Chain Stabilization Committee and expanding the number of members on its expert committee to 20 from 10.
Separate items were approved to extend by two months, through Nov. 30, the temporary cut in flexible tax rates on traffic, energy and environment taxes for gasoline, diesel and similar substitute fuels, as well as the individual consumption tax on butane, a measure intended to ease the public's fuel cost burden.
