"Do I owe tax if I collect rent?" in Korea splits completely depending on how many homes you own and how the tenancy is structured. The rules sit in two different provisions, which is why summaries state the thresholds slightly differently.
We opened the government legal guidance and the statute itself together. ⭐ One thing that turned up: a relief provision that expires at the end of this year.
⚠️⚠️⚠️ The small-home exclusion runs only to 31 December 2026. Income Tax Act art. 25(1), proviso — "a home whose residential-only floor area is 40 square metres or less per unit or household and whose published price for the taxable period is 200 million won or less shall not be counted in the number of homes until 31 December 2026." When it lapses, some owners' home count goes up.
⭐⭐⭐ Monthly rent and jeonse are judged under different provisions
| Form | Taxable when (as written) | Provision |
|---|---|---|
| Monthly rent | an owner of two or more homes counted across the couple lets a home for monthly rent | Income Tax Act art. 12(2)(b) Decree art. 8-2(3)4 |
| ⭐ even a single-home owner, where the published price exceeds 1.2 billion won | ||
| Jeonse deposit | three or more homes and total deposits above 300 million won | Income Tax Act art. 25(1) |
| two homes (those with a published price of 1.2 billion or less are not counted) and deposits of 300 million or more exceeding the amount set by Decree |
⭐⭐ Only the rent test is measured across a couple. The source writes "two or more homes counted across the couple" for rent and uses no such phrase for deposits. ⚠️ Whose homes are counted on the deposit side is not resolvable from this page, so we do not state it.
⭐ "1.2 billion won" appears twice, doing opposite jobs. On the rent side it is the threshold that makes a single-home owner taxable; on the deposit side it is the line below which a home is not counted at all.
⚠️ That deposits alone are generally untaxed is also verbatim: "basically, where you let a property receiving only a jeonse deposit, you need not file."
⭐ The small-home exclusion — four worked cases in the source
How the homes are counted flips the answer. The guidance reproduces the tax office's own consultation cases.
| Case | Outcome |
|---|---|
| 3 homes (three of 109㎡), deposits above 300M | ⚠️ taxable |
| 3 homes (two of 109㎡ + one 40㎡ under 200M), deposits above 300M | ⭐ not taxable — the small home drops out, leaving 2 homes |
| 4 homes (two of 109㎡ + two small), deposits above 300M | ⭐ not taxable — two small homes drop out, leaving 2 |
| 4 homes (three of 109㎡ + one small), deposits above 300M | taxable only if the deposits on the three non-small homes exceed 300M |
⭐⭐ The last case is the important one. A small home drops out of the deposit total as well as the home count. Total deposits can exceed 300 million and still be untaxed if the non-small homes alone stay under it.
⚠️⚠️ And, as above, this exclusion runs only to 31 December 2026. Whether it will be extended is something we could not establish.
⭐⭐ Deemed rent is not charged on the whole deposit
Once deposits become taxable, the charge is on "deemed rent." The name suggests the whole deposit is taxed; the formula cuts it twice.
| Filing basis | Formula (as written) | Provision |
|---|---|---|
| Books | (deposits above 300M) x 60% x term-deposit interest rate − interest and dividends arising in the rental business | Decree art. 53(3) |
| Estimation | (deposits above 300M) x 60% x term-deposit interest rate | Decree art. 53(4) |
⭐ On a 500 million won deposit, subtracting 300 million leaves 200 million, and 60% of that gives 120 million won to which the rate is applied (our arithmetic) — 24% of the original deposit.
⭐⭐ The books basis subtracts one more thing: interest and dividends arising within the rental business. That prevents double counting where the deposit sat in an account and interest tax was already paid. The estimation basis has no such subtraction.
⚠️⚠️ We could not confirm the term-deposit interest rate itself. It is set separately, so we have not produced a won figure for the deemed rent.
20 million won — the line where withholding can be the end of it
Being taxable does not force the income into your global return. Income Tax Act art. 14(3)7 defines "residential rental income of a person whose total gross receipts for the taxable period, as prescribed by Presidential Decree, are 20 million won or less" as separately taxed rental income.
| Income | Threshold | Measured on |
|---|---|---|
| Residential rental | 20M won or less | ⭐ gross receipts (money in) |
| Interest and dividends | 20M won or less | combined amount (money in) |
| Other income | 3M won or less | ⚠️ other income amount (after expenses) |
⚠️ All three are called "separate taxation" and all three are measured differently. Rental and financial income use money received; only other income nets off expenses first. That structure is worked through in where the freelance 3.3% comes from.
File in May, and what to put in it
- When — "submit the final return on the global income tax base to the competent tax office around May each year" (art. 70).
- If you receive rent — report "on the basis of the total monthly rent received over the year."
- If you hold deposits — compute the deemed rent above.
- Where — art. 6(1): a resident's income tax is filed at their place of domicile, not where the property is.
If you also have a salary, the filing duty is decided elsewhere — the side-income article runs every combination through art. 73. Bracket rates are in the comprehensive income tax article, and past years in the amended return.
⭐ Tenants have the mirror-image relief
The same page covers the tenant's monthly rent tax credit. It goes to "the head of a household owning no home as at the end of the taxable period … being an employee whose total salary for the taxable period is 80 million won or less," and ⚠️ excludes anyone whose global income exceeds 70 million won.
⭐ Two tests, not one — 80 million of salary and 70 million of global income both apply. The detail is in the rent tax credit article.
Questions that remain
Is a single home always exempt?
⚠️ No. A published price above 1.2 billion won makes it taxable even with one home. And the source notes that rental income from a home located abroad is also outside the exemption.
What about a mixed deposit-and-rent tenancy?
⚠️ We could not establish this. The source explains "where you receive monthly rent" and "where you receive a jeonse deposit" separately, and does not state how the two combine.
Do I need business registration first?
⚠️ Out of scope here. Registration duties sit in separate provisions; the page we opened establishes only that income triggers filing.
What happens above 20 million won?
It leaves separate taxation and joins your global income, which can push the whole into a higher bracket.
If I raise the deposit mid-year, does it count immediately?
⚠️ Not established. Decree art. 53 gives the formula only; we did not open the apportionment rules.
Sources
- ⭐⭐⭐ Ministry of Government Legislation, Easy-to-Find Practical Laws — "Moving > Filing tax and claiming credits where you have let a property". Source for the rent and deposit tests, the small-home exclusion with four tax-office cases, both deemed-rent formulas, the filing timing and basis, and the tenant credit requirements — with the provisions cited alongside.
- ⭐⭐ Ministry of Government Legislation, Easy-to-Find Practical Laws — "Comprehensive real estate holding tax and comprehensive income tax" (page states as of 15 June 2026). Source for the single-home exemption and its 1.2 billion won carve-out, the exclusion of homes abroad, the place of tax payment, and the six categories of global income.
- ⭐⭐ Korean Law Information Center — statute — Income Tax Act art. 14 (computation of the tax base) (in force 1 Jan 2026, Act no. 21221). Source for the 20M / 20M / 3M won separate-taxation thresholds.
- Our own arithmetic — a 500M won deposit giving a 120M won base (200M excess x 60%), i.e. 24% of the deposit.
What we could not confirm
- ⚠️⚠️⚠️ The term-deposit interest rate. It is set separately, so we did not produce a won example for deemed rent.
- ⚠️⚠️ Whether the small-home exclusion will be extended. The provision simply ends at 31 December 2026.
- ⚠️⚠️ The "amount prescribed by Decree" in the two-home deposit test. The source says only "300 million or more, exceeding the amount prescribed by the Enforcement Decree."
- ⚠️ Whether the deposit test counts homes across a couple. Only the rent test carries that phrase.
- ⚠️ Mixed deposit-and-rent tenancies. The source treats the two cases separately.
- ⚠️ Business registration duties. Separate provisions, out of scope here.
- ⚠️ The detail of the separate-taxation computation (expense rates, basic deduction). Not on the pages we opened.
Rent turns on home count and 1.2 billion won; jeonse turns on three homes and 300 million — different provisions. And the small-home exclusion ends on 31 December 2026.
As of July 2026 (guidance page as of 15 June 2026; Income Tax Act in force 1 Jan 2026). Thresholds, formulas and cases are the sources verbatim; the 120 million won and the 24% are ours. ⚠️ This is not tax advice — confirm your own position through Hometax or a tax professional.
