More landlords disclose rental income to gov’t
According to the Ministry of Land, Infrastructure and Transport on Monday, in May 7,625 individuals registered themselves as landlords with rental businesses. This is both a 51.5 percent surge compared to the same month a year ago and a 9.9 percent increase from April.
The number of apartments registered with the government as leased jumped by 20.5 percent over the previous month to 18,900 units. As of May this year, Korea has a total of 325,000 registered landlords, and the total number of rental units is 1.14 million.
By region, Seoul (2,788) and Gyeonggi (2,370) account for 67.6 percent of the new registrations made last month. The Gangnam area in southern Seoul, which has the hottest real estate market in the country, alone had 861 people register as landlords.
Real estate in the four districts in the area - Seocho, Gangnam, Songpa and Gangdong - are coveted due to their high-quality education services.
According to the government, the number of new registrations has been increasing since the government announced measures that encouraged landlords to register.
Landlords that have been renting out their apartments for more than 8 years now account for 84.3 percent of all landlords, up from 69.5 percent in April last year.
In December, in an effort to make income from rent more transparent and increase the supply of stable rental apartments, the government introduced numerous tax cuts that will go into effect on Jan. 1, 2019.
This includes a maximum 70 percent exemption on capital gains taxes from apartment sales, up from the current 50 percent exemption. This special tax cut only applies to those that have rented out their property for eight years or more. Renters will also get a reduction on property taxes when they rent out a unit that is 40 square meters (430 square feet) or smaller.
“As the various tax benefits, including those on capital gains taxes and comprehensive real estate taxes, only apply to those who rent out their spaces for more than eight years, many are opting for long-term rent,” said a Land Ministry official. “Other benefits, including lower income tax and health insurance, will be provided starting next year for those who make less than 20 million won ($18,586) a year renting out apartments when they have registered as a landlord. We expect the number to continue to grow.”
BY LEE HO-JEONG [firstname.lastname@example.org]