Rent Tax Credit (월세 세액공제) for Foreign Residents in Korea

Many wage-earning foreign residents renting in Korea may qualify for the rent tax credit (월세 세액공제) but miss it. The maximum is ₩1.7M per year, directly off your calculated income tax.

This guide covers who qualifies, how the credit is calculated, and exactly how to claim it. The credit is designed for wage earners (employees) and is claimed through your employer's year-end settlement process.

All figures reflect the thresholds in force as of January 1, 2024, following the statutory amendment to the Restriction of Special Taxation Act (조세특례제한법) Article 95-2. Verify current thresholds at the National Tax Service before filing (as of 2026).

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Who Qualifies for the Rent Tax Credit?

You can claim the rent tax credit if you meet all of the following conditions on December 31 of the tax year.

Rental type. You must be renting on a monthly rent (월세) contract. Jeonse (전세) renters use a separate loan interest deduction, not this credit.

Employment type. You must have wage income (근로소득). This credit is a wage-earner (근로소득자) credit under the Restriction of Special Taxation Act Article 95-2. Self-employed workers and freelancers with only business income (사업소득) generally do not qualify. The narrow exception is a 성실사업자 or filer who submits a 성실신고확인서 under Article 122-3 of the same Act.

Residency. You must be a Korean tax resident (거주자), meaning you have a Korean domicile/address under the tax rules or spent 183 days or more in Korea in the tax year.

Income cap. Your total salary income (총급여) must be ₩80M or less if you are an employee. The ₩70M figure that appears in the statute is an additional ceiling that applies when a wage earner also has other income: it limits the 종합소득금액 (comprehensive taxable income) to ₩70M, not a standalone self-employed threshold.

Home size or value. The rental property must be either 85 square meters or smaller, OR have a government-assessed value (기준시가) of ₩400M or less. These are an OR condition, not AND. A larger apartment with a low assessed value still qualifies.

Home ownership. You must not own any home in Korea as of December 31 of the tax year.

Address match. Your registered address on your Alien Registration Card (외국인등록증) or your domestic residency report (국내거소신고) must match the address on the lease contract.

No flat tax election. You must not have elected the 19% foreign-worker flat tax rate (외국인 단일세율) for the year you are claiming. That election forfeits all deductions and credits, including this one.

The following are excluded:

• Workers who elected the 19% flat tax rate for the claim year
• Renters who do not meet the Korean tax residency requirement (거주자) for the tax year
• Homeowners (even if they are currently renting another property)
• Workers with salary income above ₩80M
• Self-employed workers without wage income (except 성실사업자 under 조특법 §122조의3)
• Renters without official payment proof, such as bank-transfer or account-deposit receipts

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How Much Rent Tax Credit Can I Claim?

The credit is a percentage of the rent you actually paid during the year, up to a cap.

Rate tiers:

• 17% of rent paid, if your total income for the year is ₩55M or less
• 15% of rent paid, if your total income is between ₩55M and ₩80M

Annual rent cap: The credit applies to a maximum of ₩10M in rent paid per year. The cap was raised from ₩7.5M to ₩10M effective January 1, 2024 (as of 2024, verify at NTS).

Maximum credit: ₩10M x 17% = ₩1.7M per year.

Worked example

A foreign resident pays ₩800,000 per month in rent, totaling ₩9,600,000 for the year. Their annual salary income is ₩48M.

• Total rent paid: ₩9,600,000
• Applicable cap: ₩10,000,000 (rent paid is under the cap, so full amount counts)
• Rate: 17% (income is under ₩55M)
• Credit: ₩9,600,000 x 17% = ₩1,632,000

That amount reduces their calculated income tax. Any refund comes from tax already withheld or prepaid; the credit does not create a refund beyond available tax/prepayments.

A resident paying ₩1,000,000 per month (₩12M annually) would have their claimable rent capped at ₩10M. At 17%, the credit is ₩1.7M. The extra ₩2M in rent above the cap yields no additional benefit.

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How to claim

Employees: year-end tax settlement (연말정산)

Your employer runs year-end settlement (연말정산) in January and February each year, covering the previous calendar year. This is when you submit your credit documents to HR or payroll.

Document checklist:

1. Foreign registration certificate (외국인등록사실증명서): issued by the Immigration Service. You can get it from any community service center (주민센터) or from HiKorea at hikorea.go.kr.
2. Lease contract (임대차계약서): a copy of your signed lease for the address you lived in. Make sure the address matches your registered address on your ARC.
3. Bank transfer receipts (이체확인증 or 계좌이체 내역서): statements showing every monthly rent payment made to the landlord's account during the year. Download these from your bank's app or counter.

Submit these to your company's HR or payroll team by the deadline they set. HR will calculate the credit and apply it to your year-end settlement refund or additional tax due.

If your employer's deadline has passed, you can still claim the credit yourself via Hometax in May.

Employees who missed year-end settlement: Hometax in May

If you are an employee who did not submit documents during year-end settlement, you can file directly. File your comprehensive income tax return (종합소득세 신고) via Hometax in May of the year following the tax year. The normal filing window is May 1 to May 31.

Steps:

1. Log in to Hometax at hometax.go.kr with your ARC number and certificate or simple authentication such as Naver/Kakao, if available.
2. Go to income tax filing (종합소득세 신고).
3. Complete your income information. In the deductions section, find the rent tax credit (월세 세액공제) field.
4. Enter the total rent paid during the year.
5. Attach your foreign registration certificate, lease contract, and bank transfer receipts as scanned files.
6. Submit. Processing time can vary by filing type and tax office.

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What Are Common Mistakes in Rent Tax Credit Claims?

ARC address mismatch

The address on your ARC or domestic residency report must exactly match the address on your lease contract. If you moved and did not update your registered address, update it at your local community service center (주민센터) before you file. Under the Immigration Act (출입국관리법 제36조) general foreign residents are required to do this within 15 days of moving.

Bring your ARC, passport, and new lease contract.

Cash rent payments

Rent payments need official payment proof. Bank transfer receipts and account-deposit receipts are the safest evidence. If your landlord has been requesting undocumented cash, switch to a traceable payment method going forward. Payments you cannot document should not be included in your claim.

The 19% flat tax rate trap

Some foreign workers elected the 19% flat income tax rate (외국인 단일세율) when they first arrived, often without fully understanding what they were giving up. The flat rate forfeits all deductions and credits for the year it is in effect. There is no way to retroactively claim the rent tax credit for a year in which you elected the flat rate. If you are currently on the flat rate and your income situation makes the progressive system more advantageous, you can switch back at your next year-end settlement.

Missing prior years: the 5-year amendment window

If you paid rent and qualified in any year from 2021 through 2025 but did not claim the credit, you can file a correction claim (경정청구) via Hometax. Each year's claim is filed separately. Prepare the lease contract and payment receipts for each year. The tax office generally has a 2-month decision/notification window for correction claims; actual payment timing can vary.

A wage earner who qualified but missed claims for three years could recover up to ₩5.1M in a best-case scenario at 17% on the ₩10M annual cap for three years, limited by tax already withheld or prepaid.

Joint-name leases and subletting

The lease should be in your name or a basic-deduction dependent's name. Do not assume you can claim a lease under another person's name unless that person fits the official rule.

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What to do next

1. Check your address match first. Log in to HiKorea at hikorea.go.kr and confirm your registered address. If it does not match your current lease, go to your community service center (주민센터) today.
2. Pull your bank transfer records. Download 12 months of rent payment statements from your bank. Save them as PDFs.
3. Check whether you elected the 19% flat rate. Ask HR or check your most recent year-end settlement document. If you are on the flat rate and your effective tax rate would be lower under the progressive system, consider switching.
4. Employees: hand your documents to HR during January-February year-end settlement.
5. Employees who missed the deadline: file via Hometax in May.
6. Prior years: if you qualified in 2021-2025 and did not claim, file a correction claim via Hometax for each missed year.

For a full picture of other tax credits and benefits you may be eligible for, use the benefits checker at /tools/child-benefits.

@misc{seoulstart-korea-rent-tax-credit-guide,
  author = {{Seoulstart Editorial Team}},
  title = {{Rent Tax Credit (월세 세액공제) for Foreign Residents in Korea (2026)}},
  year = {2026},
  publisher = {Seoulstart},
  url = {https://seoulstart.com/guides/korea-rent-tax-credit-guide},
  note = {Last updated June 5, 2026}
}