Article 87 (Income Deduction, etc. for Housing Subscription Savings)

Interest income and dividend income from long-term housing savings (hereinafter referred to as "long-term housing savings" in this Article) that meet all the following requirements and were subscribed to by December 31, 2012, shall not be subject to income tax. 1. The subscriber shall be a resident aged 18 or older, and at the time of subscription, shall fall under one of the following categories: a. The head of a household (hereinafter referred to as "household" in this Article) that does not own a house, as determined by Presidential Decree. b. The head of a household who owns only one house, where the standard market price of the house (hereinafter referred to as "standard price" in this Article) under Article 99 (1) of the Income Tax Act is 50 million won or less, or a house of a size determined by Presidential Decree (hereinafter referred to as "house of national housing scale" in this Article) with a standard price of 300 million won or less. 2. The savings shall meet the requirements prescribed by Presidential Decree, such as the deposit limit and contract period.

For housing subscription savings accounts (hereinafter referred to as "youth preferential housing subscription savings accounts" in this Article) that meet all the following requirements and are subscribed to by December 31, 2028, income tax shall not be imposed on the aggregate interest income generated from such savings up to 5 million won. In this case, the deposit amount eligible for tax exemption shall be limited to an annual total of 6 million won across all financial institutions. <Newly Enacted by Act No. 15982, Dec. 24, 2018, Act No. 18578, Dec. 28, 2021, Act No. 19002, Dec. 31, 2022, Act No. 20013, Dec. 31, 2023, Act No. 20754, Dec. 31, 2024, Act No. 20885, Dec. 23, 2025> 1. The subscriber shall be a resident who falls under the category of youth as prescribed by Presidential Decree at the time of subscription, is the head of a household, etc. that does not own a house, and falls under one of the following categories: a. An employee whose total salary for the preceding tax period is 36 million won or less (limited to those who had only earned income in the preceding tax period, or who had earned income and comprehensive income not subject to aggregation into the comprehensive income tax base, and excluding those with only non-taxable income). b. A person whose comprehensive income amount subject to aggregation into the comprehensive income tax base for the preceding tax period is 26 million won or less (excluding those with earned income exceeding 36 million won for the preceding tax period and those with only non-taxable income). 2. The contract period shall be 2 years or more.

If the aggregate amount deducted under paragraph ② and Article 52 (4) of the Income Tax Act exceeds 4 million won per year, the excess amount shall not be deducted from the earned income for that year. If the aggregate amount deducted under paragraphs ② and Article 52 (4) through (6) of the Income Tax Act exceeds 8 million won per year (in cases where the long-term housing mortgage loan under Article 52 (5) of the Income Tax Act meets the requirements of each subparagraph of paragraph (6) of the same Article, the respective deduction limits apply), the excess amount shall not be deducted from the earned income for that year. In this case, eligibility as the head of household, etc. shall be determined as of the end of the tax period. <Amended by Act No. 12156, Jan. 1, 2013, Act No. 12233, Jan. 1, 2014, Act No. 12807, Dec. 23, 2014, Act No. 13718, Dec. 15, 2015, Act No. 15982, Dec. 24, 2018, Act No. 19002, Dec. 31, 2022, Act No. 20013, Dec. 31, 2023, Act No. 20754, Dec. 31, 2024>

If a person who has received income deduction for deposits in housing subscription savings accounts falls under any of the following categories, the financial institution handling the savings shall recover from the savings account upon termination of the savings an amount calculated by multiplying the cumulative amount of deposits made after the tax period for income deduction application (with an annual limit of 3 million won) by 6 percent (hereinafter referred to as "recuperation tax" in this Article), and pay it to the head of the tax office having jurisdiction over withholding tax by the 10th of the month following the month in which the termination date falls. Provided, that if the person who received income deduction proves that the amount of tax reduced by the income deduction is less than the recuperation tax, the amount equivalent to the actually reduced tax shall be recuperated. <Amended by Act No. 11597, Dec. 31, 2011, Act No. 12807, Dec. 23, 2014, Act No. 13718, Dec. 15, 2015, Act No. 15982, Dec. 24, 2018, Act No. 20013, Dec. 31, 2023, Act No. 20885, Dec. 23, 2025> 1. Termination of the savings contract within 5 years from the date of subscription. Provided, that this shall not apply if the savings contract is terminated due to the death of the saver, relocation abroad under the Overseas Emigration Act, or reasons prescribed by Presidential Decree. 2. Winning a bid for a house exceeding the national housing scale, constructed with an approved business plan under the Housing Act.

The confirmation and management of eligibility for long-term housing savings shall be as follows. <Amended by Act No. 12807, Dec. 23, 2014, Act No. 15982, Dec. 24, 2018> 1. The Commissioner of the National Tax Service shall confirm whether the subscriber of long-term housing savings meets the requirements of each subparagraph of paragraph ① at the time of subscription and notify the financial institution handling the savings within the period prescribed by Presidential Decree. 2. The Commissioner of the National Tax Service shall confirm whether the subscriber of long-term housing savings meets all the requirements of each subparagraph of paragraph ① (excluding whether the house has a standard price of 300 million won or less) as of the end of the tax period in which the seventh anniversary of the contract date falls and as of the end of each tax period that is three years thereafter, and notify the financial institution handling the savings. In this case, if the subscriber does not meet any of the requirements of each subparagraph of paragraph ① (excluding whether the house has a standard price of 300 million won or less), it shall be deemed that the savings have been terminated on the date of such notification, but paragraphs ⑥ and ⑧ shall not apply.

The procedures for subscription, termination, and tax exemption for long-term housing savings and youth preferential housing subscription savings, the procedures for income deduction for housing subscription savings and housing subscription savings, and other necessary matters shall be prescribed by Presidential Decree. <Amended by Act No. 15982, Dec. 24, 2018>