You can get 15-17% back on taxes by paying monthly rent

Monthly rent receipts turn into cash-like tax credits during year-end tax settlement.

Key Summary

• If you are an employee and your total annual income is 80 million KRW or less, you may be eligible. The deduction rates are 17%/15%, with a maximum recognized monthly rent of 10 million KRW per year.
• The residence must be within the national housing size (85㎡) or have a standard market price of 400 million KRW or less, and the address on the lease agreement must match the registered address.
• Foreigners can also qualify if they meet the resident requirements (expanded from the '2021 tax year).

Terms Explained in One Line

• Tax Credit: An amount that is directly deducted from your calculated tax
• Total Annual Income: The total amount of your annual salary from your company (before non-taxable income is excluded)
• Homeowner/Household Member without a Home: The representative/member of a family unit who does not own a home
• National Housing Size (85㎡): A residence with a usable area of 85㎡ or less
• Standard Market Price of 400 million KRW: A benchmark price for housing set by the government (only applicable for prices below this)

30-Second Check

• My total annual income is 80 million KRW or less.
• The registered address is exactly the same as the address on the lease agreement.
• The residence is 85㎡ or less or has a standard market price of 400 million KRW or less (including residential officetels and goshiwons).
  👉 If you meet 3 or more of these conditions, you are likely eligible for the monthly rent tax credit.

Points of Change

• The deduction rate of 15-17% × recognized monthly rent of up to 10 million KRW means refunds/reductions of hundreds of thousands to over a million KRW are possible.
• Documents are submitted once a year, but the accuracy is better with clean records throughout the year.
• Household members can also qualify (if the head of household does not claim housing-related deductions), and resident foreigners can also qualify.

Case Comparison

• Applicability: Meeting total income and housing conditions vs. Failing to meet at least one condition
• Key Difference: If conditions are met, 15-17% of the monthly rent is directly deducted from taxes (applied up to a 10 million KRW annual limit).
• Actual Impact: The deduction limit is determined at a level of approximately 1.5 to 1.7 million KRW (based on 15%/17% rates).

What to Do Now

1. Confirm that the registered address matches the lease agreement address (compare resident registration copy and lease agreement).
2. Collect monthly transfer records (e.g., bank transfer receipts, bank statements).
3. Check your total annual income bracket (17% for under 55 million KRW, 15% for over 55 million KRW up to 80 million KRW).

Practical Example

• A: Total income 54 million KRW, monthly rent 600,000 KRW × 12 months = 7.2 million KRW → 17% = 1.224 million KRW deduction (high potential for refund).
• B: Total income 62 million KRW, monthly rent 600,000 KRW × 12 months = 7.2 million KRW → 15% = 1.08 million KRW deduction.

Confusing Points

• “Foreigners are not eligible” → Registered foreign residents are eligible (from the 2021 tax year).
• “Household members are always ineligible” → Household members can be eligible if the head of household does not claim housing deductions.
• “Can I get a deduction for monthly rent using a cash receipt as well?” → The same monthly rent expense cannot be double-counted with credit card income deductions (monthly rent should be processed as a monthly rent deduction).

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— Reference basis: National Tax Service official guidance/Web TV announcements (deduction rates, income threshold of 80 million KRW, recognized monthly rent of 10 million KRW, housing and registration requirements, expansion to foreigners).