From now on, 'win-win lessors' who raise the rental price to 5% or less by 2024 do not have to meet the two-year real residence requirement to receive capital gains tax exemption.
Non-homeless tenants who meet certain requirements can receive a monthly rent tax credit of up to 15%, and can also receive a Jeonse loan income deduction of up to 4 million won.
The government held a meeting of ministers related to real estate today (21st) presided over by Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho and announced a plan to stabilize the rental market.
First of all, the government has decided to ease the transfer tax exemption requirements for win-win landlords who have raised their rent by 5% or less compared to the previous contract.
Currently, when transferring a house acquired after August 3, 2017 in an area subject to adjustment, such as Seoul, in order to receive tax exemption, the residence requirement must be met for at least two years.
It also waives the two-year residency requirement to receive the special long-term ownership deduction of up to 80%.
This allows the win-win landlord to receive tax benefits even if they do not actually reside in the home.
We also expand the scope of mutually beneficial lessor recognition.
Currently, win-win rental status is recognized only for single-family homeowners whose standard market price is less than KRW 900 million at the time of commencement of rental.
This means that even if you are a multi-residential person at the time of signing a win-win rental contract, special cases will be applied without discrimination if you become a single-family homeowner at the time of transfer of the house.
For example, if a multi-residential person with 3 houses a·b·c raises the rent of house c to 5% or less and then sells house a and house b first, this person will later sell house c (shared growth rental housing). You will be able to enjoy the transfer tax-free benefits without any requirements.
These benefits apply from December 20, 2021, when the win-win lessor system was first implemented, to contracts concluded on December 31, 2024.
Initially, the win-win lessor system was scheduled to be implemented until the end of this year, but it was decided to extend the application period by two years to stabilize the market.
The purpose is to prevent landlords from sending tenants out to meet the actual residence requirements and encourage them to refrain from raising rental prices.
Since this is an amendment to the Enforcement Decree of the Income Tax Act, the government can independently pursue it without the consent of the National Assembly.
The government will decide whether to extend it further depending on the market situation, but it will not provide a permanent tax benefit.
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The government also decided to raise the tax credit rate for the monthly rent paid by homeless householders from the current maximum of 12% to the maximum of 15%.
As a result, homeless householders with a total salary of KRW 55 million or less will be able to deduct 15% of their monthly rent (up to KRW 7.5 million per year) from tax.
If the total salary exceeds KRW 55 million and is less than KRW 70 million, the monthly rent tax deduction rate will increase from 10% to 12%.
Accordingly, the government expected that it would be possible to reduce the burden on tenants due to the recent rise in 'monthly rent'.
For example, in August 2018, a lessee (with a total salary of KRW 55 million) who lived in an 84 m² apartment on a lease of KRW 300 million signed a new contract in August of this year with a deposit of KRW 300 million and a monthly rent of KRW 300,000. If you sign the contract, you can save 540,000 won out of 3.6 million won in annual monthly rent as a tax credit.
However, the government has drawn a line that there is no plan to further increase the tax credit rate according to President Yoon Seok-yeol's promise (up to 24% of the tax credit rate).
We also increase the limit of income deductions for Jeonse loan or monthly rent deposit loan.
Currently, a 40% income deduction is possible with a maximum of 3 million won per year on the repayment of the loan principal and interest, but the plan is to expand the deduction limit to 4 million won a year.
The government aims to apply this from the monthly rent this year or the loan repayment this year.
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However, since the monthly rent tax credit and the expansion of the income deduction for the loan for Jeonse funds are amendments to the law, the approval of the National Assembly, including the opposition party, is essential to implement the system.
For the lessee whose renewal contract expires for the next one year, we will expand the support for Jeonse Loan.
Currently, the government provides low-interest 'supporting jeonse loans' to lessees aged 19 to 34, with an annual income of 50 million won or less, and a married couple's combined net assets of 325 million won or less. plan to give.
In this case, the deposit limit for the metropolitan area will be increased from 300 million won to 450 million won, and the loan limit will increase from 120 million won to 180 million won, respectively.
This figure reflects the average rate of increase in jeonse prices after the introduction of the contract renewal application right system.
For example, assuming that the lessee who signed a jeonse contract in the metropolitan area in August 2018 exercised the right to request a renewal in August 2020, it is calculated that the jeonse price has risen by 43% on average compared to the time of the initial contract.
The expanded limit will be applied from August 1 following the change of the Housing and Urban Fund fund management plan next month.
The government has decided to decide whether to provide additional support for renters whose contract expires after August 2023, one year later, in consideration of the trends in the jeonse market.
(Photo = provided by the Ministry of Strategy and Finance, Yonhap News)