Rent-loan repayments, housing-savings deposits and mortgage interest are usually described as three separate deductions. Open the statute and their caps overlap. The three compete inside one bucket.
1. Rent loan and savings share 4m won — not 4m each (proviso to art. 52(4)).
2. The mortgage cap contains those two as well: "the sum of that amount, the amount under paragraph 4 and the amount under STA art. 87(2)…" (proviso to art. 52(5)).
3. "And" versus "or" separates 20m won from 18m won. Only subparagraph 1 of art. 52(6) reads "pays at a fixed rate and repays without deferral".
4. The assessed value must be 600m won or less. One won over and the interest deduction goes entirely.
Enter the three amounts and the loan terms, and it shows exactly where each cut falls.
It follows the order the statute sets. Rent-loan repayments give 40% of principal and interest paid by the head of a home-owning-free household (art. 52(4)), and housing savings give 40% of what such a head paid in (up to 3m won a year) where gross pay is 70m won or less (STA art. 87(2)). Where those two together exceed 4m won a year, the excess is treated as nil (proviso to art. 52(4)). Mortgage interest requires an assessed value at purchase of 600m won or less (art. 52(5)), and the cap splits by term and repayment shape into 20m, 18m, 8m and 6m won (art. 52(6)). The rent loan and the savings sit inside that cap too. Household-head status is judged at the end of the tax year, a non-head must actually live there, and two or more homes at year end disqualifies you entirely. The size requirement, inherited loans, early repayment and the ceiling at total income (art. 52(8)) are not included. An estimate.
Two caps, one inside the other
Two provisos do the work.
Proviso to art. 52(4) … where the sum of that amount and the amount under STA art. 87(2) exceeds 4m won a year, the excess shall be treated as nil.
Proviso to art. 52(5) … where the sum of that amount, the amount under paragraph 4 and the amount under STA art. 87(2) … exceeds 8m won a year…, the excess shall be treated as nil.
The outer cap contains the inner one. Rent loan and savings are cut at 4m won first; what survives is added to the interest, and the whole is cut again at the mortgage cap.
On 50m won of pay with 10m won of rent-loan repayments, 3m won into savings and 7m won of interest (10 years, fixed rate): 4m won plus 1.2m won is 5.2m won, of which 1.2m won is cut first; the surviving 4m plus 7m won of interest comes to 11m, which the shared cap of 6m won cuts again to 6m won. A further 5m won is gone.
"And" versus "or" — one word, 20m won against 18m won
Article 52(6) has three subparagraphs. Only the first uses a different conjunction.
1. … pays the interest at a fixed rate and repays the loan without a deferral period: 20m won
2. … pays at a fixed rate or repays without deferral: 18m won
3. where the term is 10 years or more … at a fixed rate or without deferral: 6m won
| Term · shape | Cap |
|---|---|
| 15 years or more fixed AND non-deferred | 20m won |
| 15 years or more fixed OR non-deferred | 18m won |
| 15 years or more neither | 8m won |
| 10 years or more fixed OR non-deferred | 6m won |
| 10 years or more neither | no deduction |
| Income Tax Act art. 52(5) proviso and art. 52(6) [amended 31 December 2023]. Fifteen years keeps 8m won with no conditions at all, but the ten-year band requires one. | |
6m won is less than 8m won. A ten-year loan that meets a condition still sits below the fifteen-year default. On the same 15m won of interest: fifteen years with no conditions gives 8m won, ten years meeting one gives 6m won.
And under ten years there is nothing at all — paragraph 6 names only ten and fifteen.
600m won of assessed value — one won over and it all goes
Article 52(5) opens with "to acquire a house whose assessed value at the time of acquisition is 600m won or less".
It reads "or less", so exactly 600m won qualifies. And because the test is at acquisition, a later rise in value does not undo it. This figure was raised from 500m at the end of 2023.
Questions that remain
Can anyone claim the savings deduction?
No. STA art. 87(2) requires gross pay of 70m won or less and that you head a household owning no home (or are that head's spouse). Only 3m won a year of deposits counts, so the most it gives is 1.2m won. It applies to deposits made up to 31 December 2028.
What if I am not the head of the household?
You can still claim — but only where the head does not. And for the interest deduction, a head qualifies whether or not they live there, while anyone else must actually live in the house (art. 52(5)3).
What if I end up with two homes?
Two or more at the end of the tax year disqualifies you (art. 52(5)2), and homes held by other household members count too. Household-head status is also judged at year end (subparagraph 1).
What if the deduction exceeds my income?
Article 52(8): where the deduction exceeds the resident's aggregate total income for the period, the excess shall be treated as nil. A deduction cannot take you below zero.
How does this differ from a credit?
This is a deduction from income — it comes off the tax base. So the same deduction is worth more at a higher marginal rate. That is unlike medical or rent relief, which are credits against the tax itself.
What does this calculator leave out?
The size requirement, inherited loans, early repayment or closure mid-year, the income ceiling of art. 52(8), and early closure of the housing savings — close it for any reason other than winning an allocation and that year's deposits do not count.
Sources
Income Tax Act [in force 1 January 2026] [Act No. 21221] — art. 52(4) (rent-loan repayments), art. 52(5) (mortgage interest), art. 52(6) (the caps), art. 52(8) (the income ceiling).
Restriction of Special Taxation Act [1 January 2026] [Act No. 21223] — art. 87(2) (housing subscription savings).
The point of this article — that the caps nest — comes from two provisos: paragraph 4's "the sum of that amount and the amount under art. 87(2)", and paragraph 5's "the sum of that amount, the amount under paragraph 4 and the amount under art. 87(2)". Those four words in paragraph 5 tie all three deductions into one bucket.
The script was checked against the same model across 6,912 combinations — 4 pay figures x 4 rent-loan figures x 3 savings figures x 4 interest figures x 3 assessed values x 3 terms x 2 rate types x 2 repayment shapes, all matching, with the 70m won and 600m won lines tested one won either side.
Where to check
Put the figure from here into the "other deductions" field of the year-end settlement calculator to see how far it moves the tax. On the loans themselves, see jeonse loan rates and jeonse against monthly rent; for subscription points, the subscription score calculator. If you pay monthly rent, that is the rent credit — a credit, not a deduction.
