Subscription Savings Account Limit Raised from 100,000 Won to 250,000 Won After 41 Years (Comprehensive)

Ministry of Land Announces 'Follow-up Regulatory Improvement Measures' After Public Discussion

Expansion up to 250,000 KRW Starting as Early as September

If Subscription Savings Account Limit Increases
Public Housing Subscription Winning Period Can Be Shortened
Enjoy All Income Deductions

Encouragement of 'Housing Subscription Comprehensive Savings Account' Applicable to Both Private and Public Housing

The limit of "100,000 KRW monthly payment for subscription savings accounts," which has been maintained for 41 years since 1983, will be raised to 250,000 KRW as early as this September, considering the rise in household income. This will reduce the waiting period until winning a public housing subscription and allow subscribers to fully enjoy income deduction benefits. On the 13th, the Ministry of Land, Infrastructure and Transport announced the "Post-Debate Regulatory Improvement Measures" project, which includes these subscription system reforms.

Subscribers to the subscription savings account can save between a minimum of 20,000 KRW and a maximum of 500,000 KRW per month, but the recognized payment amount when selecting winners for public sale housing is 100,000 KRW per month. Public housing winners are selected based on the total savings in the subscription account, with the current winning threshold usually between 12 million and 15 million KRW. Increasing the recognized monthly payment limit to 250,000 KRW will shorten the winning period for public housing subscriptions, which currently takes over 10 years even when paying 100,000 KRW monthly.

Starting this year, if the head of a household without a home has a total salary of 70 million KRW or less, 40% of the annual subscription savings payment (up to 1.2 million KRW) can be deducted from income tax during year-end tax settlement, up to 3 million KRW annually. Saving 250,000 KRW monthly will reach the 3 million KRW limit, making it possible to receive the income deduction.

Subscription opportunities for the public will also be expanded. The "subscription savings for private housing," which was for private housing, and the "subscription savings for public housing," which was for public housing, will be combined into a "Comprehensive Housing Subscription Savings Account" that allows subscription to all types of housing. Even after conversion, the existing payment records of the previous accounts will be recognized as is. However, the expanded subscription opportunities will only recognize performance from new payments.

Kim Hyoseon, Senior Real Estate Specialist at NH Nonghyup Bank, said, "Since this only expands the eligible subscription targets without penalizing the advantageous parts accumulated in existing accounts, it is expected to expand demand for both public and private housing," and predicted, "The subscription competition rates in some popular areas may increase further."