[President Yoon Seok-yeol Elected] Relief for Tenants' Jeonse and Monthly Rent Burdens... Reconsideration of the 'Lease 3 Acts'

Proposed Doubling of Monthly Rent Tax Credit Rate
Expansion of Income Deduction for Jeonse Loan Principal and Interest Repayment
'Imdacha 3-beop' Expected to Be Reconsidered

President-elect Yoon Seok-yeol is expressing his gratitude to supporters in front of the People Power Party headquarters in Yeouido, Seoul, on the 10th. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Hwang Seoyul] With Yoon Seok-yeol, the People Power Party candidate, winning the 20th presidential election, the burden of jeonse and monthly rent for tenants is expected to ease. Additionally, since he has pledged to fully review the 'Lease 3 Acts,' there is growing interest in how the related laws will be amended.

Yoon Seok-yeol's jeonse and monthly rent policy focuses on reducing housing cost burdens for low-income and middle-class households. This pledge comes in response to the steep rise in jeonse prices and the acceleration of the conversion of jeonse to monthly rent, which has increased housing cost burdens for ordinary citizens.

Candidate Yoon promised to reduce tenant burdens by increasing the monthly rent tax credit. Currently, non-homeowner household heads who are workers earning a total salary of 70 million KRW or less, and tenants renting houses of national housing size (exclusive area of 85㎡) or less, or with a standard market price of 300 million KRW or less, can receive a monthly rent tax credit at a rate of 10% to 12% during year-end tax settlement. Yoon proposed doubling the monthly rent tax credit rate. According to the pledge, tenants earning a total salary of 70 million KRW or less will have their tax credit rate raised to 20% (currently 10%), and those earning 55 million KRW or less will have it increased to 24% (currently 12%). The annual monthly rent limit will also increase from the existing 7.5 million KRW to 8.5 million KRW.

The burden of jeonse loan repayments is also expected to be alleviated. Candidate Yoon promised to expand income deductions on principal and interest repayments of jeonse loans. For non-homeowner household head workers renting national housing size residences, the income deduction rate will be raised from the current 40% to 50%, and the deduction limit will increase from 3 million KRW to 4 million KRW (including housing subscription savings deductions).

Furthermore, Yoon pledged to fully review the 'Lease 3 Acts' (Jeonse and monthly rent reporting system, rent ceiling system, and contract renewal request right system) implemented by the Moon Jae-in administration. In the presidential candidate debate on the 3rd of last month, he identified the Lease 3 Acts as the real estate policy that needs the most urgent revision. While maintaining the framework of the Lease 3 Acts, he intends to reduce the renewal right period extended to 4 years back to the previous 2 years. Instead, there is a high possibility of moving toward increasing the supply of low-priced private rental housing by providing tax benefits to landlords who do not raise jeonse prices.