Lee and Yoon "Easing Jeonse and Monthly Rent Burdens"... Diverging Views on the 'Lease 3 Acts'

Lee and Yoon "Tax Credit for Monthly Rent and Relief on Jeonse Loan Burden"
Diverging Views on the Three Lease Laws
Lee "Bills for Tenant Stability"
Yoon "Full Reconsideration Needed"

Lee Jae-myung, the Democratic Party presidential candidate, and Yoon Seok-youl, the People Power Party presidential candidate, are attending the Local Autonomy Awards and Korea Regional Development Awards ceremony hosted by the Korea Local Newspaper Association at the Press Center in Jung-gu, Seoul, on December 27 last year, exchanging greetings. Photo by National Assembly Press Photographers Group

[Asia Economy Reporter Hwang Seoyul] Both Lee Jae-myung, the presidential candidate of the Democratic Party of Korea, and Yoon Seok-yeol, the presidential candidate of the People Power Party, have proposed pledges to ease the burden of jeonse and monthly rent for low-income and actual users. However, despite the seemingly similar pledges, their opinions diverged regarding the "Three Lease Laws."

According to the respective campaign pledges of the Democratic Party and the People Power Party candidates on the 9th, both candidates proposed expanding tenant support policies such as increasing the monthly rent tax credit and expanding jeonse loan policies.

Both candidates pledged to reduce tenant burdens by increasing the monthly rent tax credit. Currently, non-homeowners who are heads of households with a total annual salary of 70 million KRW or less, renting a house of national housing size (exclusive area of 85㎡) or less, or a house with a standard market price of 300 million KRW or less, can receive a monthly rent tax credit of 10% to 12% during year-end tax settlement.

Candidate Lee Jae-myung announced plans to expand the credit rate to 15% to 17% and relax the housing requirement to houses with a standard market price of 500 million KRW or less. Additionally, he proposed introducing a carryover system for the monthly rent tax credit, allowing unused tax credits in the current year to be carried over for up to five years. For youth, the expansion of the monthly rent tax credit would support rent equivalent to two months.

Candidate Yoon Seok-yeol proposed doubling the monthly rent tax credit rate. According to his pledge, the tax credit rate for tenants with a total annual salary of 70 million KRW or less would increase to 20% (currently 10%), and for tenants with a total annual salary of 55 million KRW or less, it would rise to 24% (currently 12%). The annual monthly rent limit would also increase from the existing 7.5 million KRW to 8.5 million KRW.

Both candidates also presented policies to reduce the burden of jeonse loan repayments. Candidate Lee promised to expand income deductions for principal and interest repayments on jeonse loans targeted at youth. Candidate Yoon proposed increasing the income deduction rate for non-homeowner heads of households living in national housing-sized rental homes from 40% to 50%, and raising the deduction limit from 3 million KRW to 4 million KRW (including housing subscription savings deduction).

However, their opinions sharply diverge regarding the Moon Jae-in administration's "Three Lease Laws" (Jeonse and Monthly Rent Reporting System, Jeonse and Monthly Rent Cap System, and Contract Renewal Request Right System).

Candidate Lee's position is that the current system should be maintained. Although there is confusion in the early stages of implementation, he believes it is a law for tenant stability and requires adaptation. Instead, he argues that the proportion of long-term public rental housing, currently at about 5%, should be increased to 10%, and various types of rental housing such as social housing (cooperative type) and shared housing should be expanded to minimize the side effects caused by the lease laws.

Candidate Yoon, during the presidential candidate debate on the 3rd of last month, identified the Three Lease Laws as the real estate policy that needs the most urgent revision. While maintaining the framework of the Three Lease Laws, he intends to reduce the renewal right period, which was extended to four years, back to the previous two years. Instead, he is reportedly considering providing tax benefits to landlords who do not raise jeonse prices to increase the supply of low-priced private rental housing.

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