South Korea has identified 89 out of 229 local administrative districts as population decline areas, designated by the Ministry of the Interior and Safety since 2021. To address ongoing demographic challenges, the government enacted the Special Act on Support for Population Decline Areas, effective January 1, 2023. This law mandates five-year master plans and annual implementation plans, introducing the concept of ‘living population’ to include not only residents but also commuters and students. The goal is to revitalize these regions and improve quality of life through targeted support and incentives.
The affected areas include rural and semi-urban districts such as Gangwon-do’s Yeongwol and Pyeongchang, and several counties across Chungbuk, Jeonbuk, Jeonnam, Gyeongnam, and others. Businesses in industrial, logistics, and tourism complexes in these regions now receive a 75% acquisition tax reduction, up from the previous 50%. First-time homebuyers in these areas benefit from an increased acquisition tax deduction, now up to 3 million KRW. Additionally, local governments are distributing increased local gift certificates, with national funding support rates raised to 7% for population decline areas.
Implementation of these measures began in early 2024, with further enhancements introduced in November 2023. From April to June 2024, travelers to 16 designated population decline areas can receive a 50% refund on travel expenses (up to 100,000 KRW) in the form of mobile local gift certificates. A pilot basic income program launched in February 2024 provides 150,000 KRW per month to residents in 10 rural counties, with the first payments distributed on February 26–27 and the program running through next year. The government plans to expand travel subsidies to additional regions and is closely monitoring the impact of the basic income initiative.
Frequently asked questions include: Who is eligible for these benefits? Residents, businesses, and travelers to designated population decline areas qualify for various incentives, subject to local application and verification processes. What impact have these policies had so far? Early results show increased local consumption, reopening of businesses, and even population growth in some areas, such as Cheongyang County. The government is evaluating outcomes to refine and potentially expand these programs in the future.
Metaqsol opinion: South Korea’s targeted support for population decline areas, including tax breaks, travel subsidies, and a rural basic income pilot, reflects a comprehensive strategy to revitalize struggling regions. The early positive outcomes, such as increased local consumption and population growth in places like Cheongyang County, indicate that these measures are making a tangible difference. The government’s commitment to ongoing evaluation and expansion of these programs is essential to ensure sustainable regional development. These policies could serve as a model for other countries facing similar demographic challenges.