Reporting Housing Lease

One should notify the content of lease contract to the district office after he or she makes a contract for leasing a house on a deposit base from now on. The standard contract form for the lease should be used. Seoul City Hall announced on the 10th that it would introduce the measure to disclose the homeowner`s source of income or tax revenue, which is allegedly the best way to stabilize the price of houses in the Kangnam area.

Reporting the content of the lease is presently not a requirement, so there is no basis to levy a tax when the owner of the house increases the deposit for the lease, which is the main cause for the jump in deposit for lease.

The City of Seoul will request that the Ministry of Justice add the provision that make it `a duty to notify the content of the lease contract` in the house leaseholder protection law.

According to the measure, after the owner of a house and leaseholder make a contract, they should notify the content to the district office in a given period. This is to collect information that will allow the National Tax Service (NTS) to impose income taxes by verifying the amount of deposit money the property owner received when lease deposit amount soars.

A city official said, "The property owner and leaseholder might agree to report less than they contracted. But an intensive tax investigation on the owner who reports an amount less than the market price would prevent the false report."

He added, "If NTS establishes the database of lease deposit money on the basis of the reports, it can systematically monitor the amount of lease deposit money. Requiring the use of the `standard contract form for lease` which clearly lists the deposit money, lease period and so on, will make possible systematic administration of tax sources of the house lease traders."

The city plans to accuse the construction or consulting companies that exaggerate the enterprise of construction and to request that the NTS conduct tax investigations. These are measures in response to indications that the companies spread a rumor of reconstruction projects, which are not yet decided, and caused home prices to increase.

Jin-Hup Song jinhup@donga.com · Jae-Seong Hwang jsonhng@donga.com