Korea's Monthly Rent Tax Credit: the 80M-Won and 17% Thresholds

Korea's monthly rent tax credit deducts 15–17% of rent paid, up to 10 million won a year, directly from tax owed. The rate is 17% for total salary at or below 55 million won and 15% between 55 and 80 million won. Fill the cap and that is 1.7 million or 1.5 million won back.

Divide the 10-million-won cap by twelve and you get 833,333 won a month. Rent above that adds nothing to the deductible base. Studio rents in Seoul often sit near that line, so in practice most tenants are stopped by the eligibility rules rather than by the cap.

Four conditions must hold at once

The National Tax Service sets out four requirements. Miss one and the rest do not matter.

Income — total salary of 80 million won or less for the tax year, or comprehensive income of 70 million won or less including employment income. Total salary means gross pay minus non-taxable items, so read it off the withholding receipt rather than the offer letter.

Home ownership — head of a household that owns no home as of the year's end. A household member other than the head also qualifies, provided the head has claimed neither the housing fund deduction nor the housing savings deduction. The test applies to the whole household: if a registered family member owns property, the renter is blocked even while personally owning nothing.

The dwelling — national housing size (85㎡ or less) or an assessed value of 400 million won or less. Either one suffices. Residential officetels and gosiwon rooms count, so an officetel address is no reason to give up in advance.

Address — the address on the lease must match the resident registration record. Rent paid before a delayed move-in registration falls outside the credit. The lease must be in the taxpayer's name or that of a basic dependant.

Documents required: a resident registration abstract, a copy of the lease, and proof of payment such as transfer receipts or deposit slips. Cash handed over without a record fails at the evidence stage.

How much rent counts — the cap bites at 833,000 won a month

The deductible base is min(annual rent paid, 10,000,000 won), and the refund is that figure times the rate.

The last two rows are identical. A tenant paying 1,000,000 won a month gets back exactly what a tenant paying 833,333 won gets — 166,667 won more each month, two million won more a year, and not one won more in refund. That line is one input when weighing a shift toward a larger deposit and lower rent; read alongside the conversion rate that translates deposit into monthly rent, the trade-off becomes visible.

As with any tax credit, assessed tax must exist for it to land. Where income is low enough that assessed tax is already zero, unused credit simply disappears.

At 55 million won, 100,000 won of salary costs 200,000 won

The rate splits at total salary of 55 million won. Cross it and the refund falls even though the deductible base is unchanged.

Salary rises by 100,000 won; the refund drops by 200,000 won. On this line item alone, the taxpayer ends up 100,000 won worse off. Few people can dial their salary, but where the timing of a bonus is negotiable or non-taxable allowances can be restructured, the 55-million-won line is worth putting into the calculation.

Rent leaves the account every month, but the credit vanishes whole on a single failed condition — fix the conditions before optimising the amount.

Missed years can be reclaimed for five

Leaving the rent line blank at year-end settlement is not final. A correction claim recovers it retroactively, within five years. On the timeline set out by KB Kookmin Bank, a claim on 2025 income runs from 1 June 2026 to 31 May 2031 — which means 2021 income is still live today.

The rent credit is a classic omission because it does not appear automatically in the simplified filing service. Claims go through Hometax under the comprehensive income tax filing menu, or by post or in person at a district tax office. Review typically takes about two months, with payment to the account listed on the form.

Five years claimed together adds up. A renter under 55 million won in salary paying 600,000 won a month would be looking at 1,224,000 won a year, or 6.12 million won over five. Each year must independently have met the ownership, income and address conditions as they stood then, with the lease and transfer records to prove it.

What to check

• Total salary on the withholding receipt — not gross pay, but salary net of non-taxable items, against the 80-million and 55-million lines
• Household composition on the resident registration abstract — whether any registered family member owns a home, and whether the household is separated
• Whether the lease address matches the registration address, and the date of move-in registration
• The dwelling's floor area or assessed value — above 85㎡ still qualifies if assessed at 400 million won or less
• Payment records — if bank transfers are missing, whether deposit slips or other evidence survive
• The past five years of settlements — which years left the rent line blank, and whether those leases are still on file

Sources

• Monthly rent tax credit (National Tax Service)
• Reclaiming tax through a year-end settlement correction claim (KB Kookmin Bank)