South Korea expands monthly rent support, increases tax credits for young people

South Korea is implementing a comprehensive package of housing support measures aimed at alleviating the financial burden on young people, including expanding monthly rent subsidies and enhancing tax benefits. The government announced on February 28 its 'Comprehensive Investment Promotion Strategy for Youth Growth Stages,' designed to build a housing ladder from monthly rent to full ownership.

The monthly rent support, which provides up to 200,000 won per month for a maximum of 24 months, will now be available to individuals earning up to 100% of the median income (approximately 2.73 million won for a single-person household). Previously, the threshold was 60% of the median income (1.54 million won). This program, initially set to end in 2025, has been converted into a permanent initiative, broadening its reach. For young people in the lowest income bracket, the support period will be doubled to 48 months.

Furthermore, the government is enhancing tax incentives for young renters. The rent tax credit rate for young, non-homeowners with a total annual income below 80 million won will be raised to 17%, up from the standard 15%. The annual deduction limit for rent expenses will also increase from 10 million won to 12 million won.

Support for semi-jeonse (a hybrid lease with a partial deposit and monthly rent) is also being strengthened. Starting January, a 'Youth Combined Jeonse and Monthly Rent Guarantee' will be introduced for a limited two-year period. This new product will cover both jeonse loans and monthly rent loans, accommodating diverse rental situations. The guarantee will cover up to 90% of the lease deposit, with loans totaling an estimated 4.5 trillion won annually.

Additional measures include expanding eligibility for the jeonse deposit return guarantee to those earning up to 200% of the median income. The income requirement for the 'Youth Housing Dream Account' subscription will be raised from 50 million won to 70 million won. The government also plans to introduce a new 'Youth Universal Public Rental Housing' category with relaxed eligibility criteria to increase supply, and will raise the deposit support limit for single-person households in the Seoul metropolitan area from 120 million won to 240 million won.