'Good Landlord Tax Credit' Extended for 6 More Months (Comprehensive)

Measures to Alleviate Rent Burden for Small Business Owners

Tax Credit Application Deadline Extended to June Next Year
'Good Landlords' Included in Small Business Policy Fund Support
Promotion of Financial Products Exclusively for Good Landlords
Small Business Federation "Welcomes Government's Will to Expand Good Landlord Movement... Regrets Absence of 'Direct Rent Support'"

[Asia Economy Reporters Joo Sang-don (Sejong) & Jang Se-hee] The government has decided to extend the tax credit support period by an additional six months, which provides a 50% tax credit on income and corporate tax for rent reductions, to promote the spread of the 'Good Landlord' movement. Additionally, small business policy funds will be provided to landlords who reduce rent by a certain level. Instead of direct rent support to small business owners, the government aims to reduce rent burdens by encouraging landlords' voluntary participation.

On the 12th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, held the '19th Emergency Economic Central Countermeasures Headquarters Meeting and the 219th Foreign Economic Ministers Meeting' at the Government Seoul Office and announced the 'Measures to Alleviate Rent Burden for Small Businesses.'

Deputy Prime Minister Hong said, "Starting with Jeonju Hanok Village in February, many landlords nationwide have voluntarily reduced rents," adding, "This has provided practical benefits to small businesses and has become a symbol of social solidarity."

However, small business owners still cite rent burden as their biggest management difficulty. According to the 'Survey on the Impact on Small Businesses after the Resurgence of COVID-19' released by the Small Business Federation on the 5th, nearly 90% of small business owners still feel burdened by rent. Only 5.5% responded that rent had been reduced, while 13.7% said rent had increased. Small business owners have yet to feel the effects of the Good Landlord movement.

Earlier in late February this year, the government decided to provide tax credit benefits to landlords participating in the 'Good Landlord Movement,' which began in the private sector. The tax support application period was originally from January to June this year, extended once to December, and now extended again to June next year. The support period for rent reduction, payment deferral, and late fee reduction on national property leases is also extended to the end of June next year.

The government will also provide financial support for good landlords. The Ministry of SMEs and Startups will temporarily include 'landlords who reduce rent by a certain level' in the eligible sectors for small business policy funds (loans) and will promote the launch of preferential financial products for landlords who reduce rent. In addition, free electrical safety inspections will be conducted on buildings owned by landlords who reduce rent, and the period for awarding additional points to markets participating in rent reduction when selected for the Ministry's 'Traditional Market and Shopping District Revitalization Project' will be extended until 2022. To encourage large corporations to participate in rent reduction, their rent reduction performance will be reflected in the 'Win-Win Growth Index' evaluation.

The Small Business Federation highly evaluates the government's will to expand the Good Landlord movement but insists on the need for direct government support. A federation official said, "We welcome the government's extension of support to expand the Good Landlord movement, as small business owners have yet to feel its effects. However, alongside the Good Landlord movement, which relies on landlords' goodwill, the government should also step in with direct rent support, as some local governments are doing."

Meanwhile, the meeting also discussed the 'Economic Impact and Response Direction Following the U.S. Presidential Election.' First, a government-wide 'U.S. New Administration Economic Cooperation Task Force (TF)' will be formed. Deputy Prime Minister Hong said, "Considering President-elect Biden's policy pledges, many changes are expected, including efforts for unity, implementation of COVID-19 crisis stimulus packages, manufacturing innovation policies, job and middle-class restoration, expansion of green investments, return to multilateralism, and strengthened cooperation with allies." He added, "Regarding the global economy, there are many forecasts that overall uncertainty will ease, and the effects of expansionary fiscal policy and improved international trade conditions will contribute to economic recovery." Furthermore, he noted, "Green vehicles, batteries, and renewable energy industries present opportunities, but industries like steel and petrochemicals need to prepare for possible stricter standards."

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