"Still Missing Out Because You Don't Know?"...Essential Tips for Protecting Your Money for Monthly Rent Tenants [Misconceptions about Money]

Up to 17% Refund Possible... Income Requirements Apply

Even with a Small Deposit, Register Your Address and Obtain a Fixed Date

Editor's NoteMoney-related issues are some of the most common problems people encounter in daily life, yet it is often difficult to know the exact standards or rules that apply. Many people suffer unnecessary losses due to widely accepted practices or misinformation. [Misconceptions about Money] organizes and explains common misunderstandings about everyday financial issues—such as taxes, fees, contracts, and refunds—based on public data and official standards.

"Isn't monthly rent just money that disappears every month?"

Unlike jeonse, where a large lump-sum deposit is required, monthly rent does not tie up significant funds. As a result, many people view monthly rent payments as nothing more than a form of consumption. For young professionals and single-person households especially, monthly rent is often seen as an unavoidable fixed expense.

However, a closer look at the system reveals a different story. A portion of monthly rent can be reclaimed through tax credits, and the deposit is legally protected. The problem is that many miss out on these benefits simply because they are unaware of them.

You Can Get a Tax Credit for Monthly Rent at Year-End Tax Settlement

Tenants without a home of their own who meet certain requirements can claim a monthly rent tax credit. This program allows you to deduct a portion of the rent paid from your taxes, effectively refunding some of the taxes already paid.

Nevertheless, many people do not apply for this benefit. Reasons include concerns that the requirements might be too strict, lack of guidance from their employers, or not wanting to mention it to their landlords. However, the tax credit does not require the landlord's consent, and the eligibility criteria are relatively clear.

AI-generated illustration. ChatGPT

Basically, you must not own a home, and you must meet certain income thresholds (annual total salary of 80 million won or less, or total comprehensive income of 70 million won or less). You must have a valid lease contract, and your address must be registered as your place of residence. If you pay your monthly rent by bank transfer, your financial transaction records can be used as supporting documents.

Additionally, the home must be within the size of a national housing unit (85㎡) or have an official standard market value of 400 million won or less (including residential officetels and gosiwon rooming houses). If your annual total salary is 55 million won or less (or total comprehensive income is 45 million won or less), you can receive a tax credit of 17% of the rent paid. If your annual total salary exceeds 55 million won but is 80 million won or less (excluding those with total comprehensive income exceeding 70 million won), you are eligible for a 15% tax credit. The maximum amount eligible for deduction is 10 million won per year.

It is important to note that this benefit is not applied automatically. Even if your company handles the year-end tax settlement for you, you must submit the necessary documents yourself to receive the deduction. You need to provide the lease agreement, a copy of the property registration, and records of each monthly rent payment transferred to your landlord. Considering that monthly rent payments can add up to a significant amount over a year, it is a missed opportunity to treat these payments as simple expenses.

Don't Be Complacent Just Because the Deposit Is Small—Your Rights Are Separate

Another common misconception about monthly rent contracts is the belief that "a small deposit means low risk." Because the deposit is much smaller than with jeonse, it is easy to take the contract lightly. However, your legal rights arise regardless of the deposit amount.

When you file a change of address report and obtain a fixed date for the lease, you acquire both the right to oppose third parties and preferential reimbursement rights. This means that even if the ownership of the property changes or the property is auctioned off, you may be able to claim your deposit first within certain limits.

A residential neighborhood in Seoul (photo not directly related, for article illustration only). Photo by Hyunmin Kim

On the other hand, delaying these procedures can affect the scope of your protection. Even if there is a signed lease contract, if you delay registering your address or do not obtain a fixed date, you may lose priority in case of auction or legal disputes. In particular, when there are prior mortgages or unpaid taxes, the order of deposit repayment becomes a critical issue.

Having a monthly rent contract does not mean your legal obligations and rights are any less important. Legal structures regarding tax benefits and protection of property rights apply to monthly rent just as they do to other types of leases.

It is important to remember that monthly rent is not simply "money passing through your account." You can reclaim part of it through tax credits, and your deposit is protected under the law if you follow the proper procedures. The more you perceive monthly rent as just "money that's bound to be spent," the more likely you are to miss out on tax refunds and the rights you are entitled to. Whether you view monthly rent merely as an expense or as the starting point of your rights ultimately depends on how well-informed you are.

This content was produced with the assistance of AI translation services.