Can Foreign Employees Get Tax Benefits for Rent and Mortgage Interest in Korea?
Can Foreign Employees Get Tax Benefits for Rent and Mortgage Interest in Korea?
“I work in Korea and pay rent or mortgage interest. Can I get a tax benefit?”
If you are a foreign employee working in Korea, you may be eligible for certain housing-related tax benefits when filing your year-end tax settlement.
Two important benefits are monthly rent tax credits and mortgage interest income deductions.
Monthly Rent Tax Credit
Foreign employees who meet the requirements may be eligible for a tax credit on monthly rent.
Generally, the taxpayer must have:
Annual salary of KRW 80 million or less
No home owned by the household
A rental contract under the taxpayer's name or the name of an eligible basic deduction dependent
The registered address and the address on the rental contract must match
The rented property must generally be 85㎡ or smaller or have a standard market value of KRW 400 million or less. Residential officetels and goshiwons can also qualify if the requirements are met.
The tax credit is:
17% of eligible rent if annual salary is KRW 55 million or less
15% if annual salary exceeds KRW 55 million but is KRW 80 million or less
The amount of rent eligible for the credit is limited to KRW 10 million per year.
Mortgage Interest Income Deduction
If you own a home and pay interest on a qualifying long-term mortgage, you may be able to receive an income deduction for the interest paid.
Generally, the home must have had a standard market value of KRW 600 million or less when it was acquired, and the taxpayer must meet the applicable household and mortgage requirements.
For qualifying mortgages, the deduction limit can be:
Up to KRW 8 million for mortgages with a repayment period of 15 years or more
Up to KRW 18 million for certain 15-year-or-longer fixed-rate or non-deferred repayment mortgages
Up to KRW 20 million for certain 15-year-or-longer mortgages that are both fixed-rate and non-deferred repayment
The exact limit depends on the type and terms of the mortgage.
Can Foreigners Get These Benefits?
Yes. Certain foreign employees who meet the legal requirements can be included in these housing-related deductions and credits.
However, being a foreigner does not automatically mean that you qualify. Residency status and other requirements under Korean tax law may need to be checked.
The National Tax Service confirms that certain foreign employees have been included in the scope of these housing-related benefits since 2021.
What Should You Prepare?
For rent, you may need documents such as:
Resident registration record
Rental agreement
Proof of rent payments, such as bank transfer records
For mortgage interest, documents such as an interest payment certificate and documents confirming the home's value may be required.
Working in Korea?
If you pay rent or mortgage interest in Korea, it is worth checking whether you qualify for these benefits before your year-end tax settlement.
If you are unsure about your eligibility, consulting a qualified tax professional can help you determine which housing-related tax benefits apply to your situation.
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