# A 50-year-old living in Seongdong-gu, Seoul, bought an apartment worth 600 million won in 2017 and registered it as a long-term rental type for 8 years and enjoyed various tax benefits. In May of last year, less than three years later, it was revealed that it made a profit of 400 million won.
#B, a resident in Yangcheon-gu, registered an apartment as a long-term rental for 8 years in 2013, but refused to renew the tenant’s contract because the married child would live in the apartment despite the rental obligation.
The Ministry of Land, Infrastructure and Transport and the Ministry of Public Administration and Security announced on the 31st that, as a result of last year’s investigation of whether rental businessmen comply with public obligations, 3692 cases were found.
If you are registered as a rental business, you receive various tax benefits, such as capital gains tax, acquisition tax reduction, and comprehensive real estate tax total exclusion. Instead, it maintains the rental housing within the specified period, guarantees the tenant’s right to apply for contract renewal, and has public obligations such as not raising the rent more than 5% of the previous period.
The rental companies caught this time did not comply with the mandatory rental period by registering rental housing and taking only tax benefits and disposing of the house within the rental period. In addition, there were many cases of violation of the obligation to increase rent by 5% or the business owners themselves living in rental housing.
The Ministry of Public Administration and Security decided to promptly recover the local taxes that had been reduced or exempted for these houses, and to proceed with measures such as imposing fines for negligence and canceling the rental business registration depending on the severity. The National Tax Service is also planning to perform tax verification on the notified houses and collect comprehensive real estate tax, transfer tax, and rental income tax that have not been properly paid.
An official from the Ministry of Public Administration and Security explained, “We will take follow-up measures to ensure that no tax benefits are applied to rental companies who violate public obligations,” and said, “We plan to conduct joint inspections regularly in the future.”
Reporter Sujeong Ha [email protected]
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