Reporting global income tax for the lessor
Object of declaration- As the lessor who receives monthly rent earns income from the lease of a house, he/she shall report it as global income tax. Either of the following cases is considered to constitute house lease income (Subparagraph 2 (b) of Article 12 of of the Income Tax Act and Article 8-2 (3) 4 of the Enforcement Decree of the Income Tax Act).
· Where the owner of two or more houses, including a couple jointly possessing at least two houses, lets out a house to receive a monthly rent
· Where a person who possesses only one expensive house worth over KRW 1.2 billion at the standard market price lets out it to receive a monthly rent
- Where a person makes a lease with only a lease deposit, he/she does not need to report the comprehensive income tax, but where the total amount of lease deposit among owners of three or more houses exceeds KRW 300 million, he/she shall report the comprehensive income tax (Article 25 (1) of the Income Tax Act).
· However, a house in which the area used only for residential purposes is less than 40 m2 per household, and the standard market price of the relevant taxation period is less than KRW 200 million shall not be included in the number of houses until December 31, 2023 (Article 25 (1) of the Income Tax Act).
Reported income amount- In the case of monthly rent receipt
· The sum total of the monthly rents received for one year shall be reported for general income tax
- In the case of key money receipt
· Method of calculating deemed rent (Article 53 (3) and (4) of the Enforcement Decree of the Income Tax Act)
√ Bookkeeping report: Deposit over KRW 300 million × 60% × Interest rate of a fixed deposit ㅡ Interest dividends from lease business
√ Report of estimation: Deposit over KRW 300 million × 60% × Interest rate of a fixed deposit (Article 53 (4) of the Enforcement Decree of the Income Tax Act)
Method of report- The final report on the tax base for global income shall be submitted to the competent tax office in May of each year (Article 70 of the Income Tax Act).