Gov't moves to ease 'marriage penalty' with lower public housing bar, reduced loan burden

The government plans to lower the bar for married young people to move into public rental housing, ease the interest rate burden on jeonse loans, and expand eligibility and tax benefits for the Youth Future Savings Account.

The measures aim to eliminate the so-called "marriage penalty" — the loss of support benefits that kicks in after couples register their marriage — and restructure the system so that marriage itself becomes an incentive.

The Ministry of Planning and Budget unveiled the plan, titled "Measures to Promote Marriage-Friendly System Reform," at the third ministerial meeting on youth policy Tuesday, chaired by Prime Minister Kim Min-seok.

The government said the share of unmarried people in their 30s has been growing and that delays in marriage registration are becoming more common. It cited a rise in the proportion of couples waiting more than a year to register their marriage — from 10.9 percent in 2014 to 19.0 percent in 2024 — and concluded that the marriage penalty, under which housing, asset and tax benefits shrink after registration, is a contributing factor in delayed marriage.

In response, the government moved to revamp the system to reduce the disadvantages of marriage and expand its benefits.

On housing, the government will expand newlyweds' access to public rental units. The monthly income ceiling for dual-income newlywed couples applying for Haengbok Housing will rise from 7.63 million won (about $4,930) to 9.39 million won, while the general supply threshold for integrated public rental housing will increase from 7.98 million won to 9.24 million won per month. The priority supply threshold will also rise — from 4.62 million won to 6.30 million won per month — lowering the overall barrier to entry for newlyweds.

Single young people living in public rental housing will be allowed to renew their lease once even if they exceed the income or asset limits after getting married. Eligibility to apply for a transfer to a larger unit will also be expanded so that households with children can move to a more spacious apartment as their family grows.

For Butimok jeonse loans — government housing fund loans approved before marriage — the surcharge interest rate applied when a couple's combined income exceeds the threshold after registering their marriage will be cut from 0.3 percentage points to 0.15 percentage points.

Apartment subscription opportunities will also be broadened. A policy allocating up to 10 percent of privately built housing units as a newborn special supply for households with children under age 2 — regardless of the seven-year marriage requirement — is set to take effect this month.

The government will also address a rule that limits the income deduction for jeonse loan principal and interest repayments — currently 40 percent of repayments — to just one spouse after marriage registration. It is reviewing whether to extend the deduction to both spouses in cases where couples live apart, such as weekend couples or those separated by a public institution's relocation outside Seoul.

Income thresholds for two-person households under the Youth Future Savings Account will be raised to prevent couples from losing eligibility upon marriage. For the standard tier, the two-person household income ceiling will increase from 94.32 million won to 117.90 million won per year; for the preferential tier, it will rise from 70.74 million won to 94.32 million won.

The government is also reviewing changes to the fuel tax refund for compact cars. Under current rules, a household that owns two compact cars after registering their marriage loses eligibility for the refund entirely; the proposed revision would allow one refund per household.

In the agriculture and fisheries sector, the government plans to expand settlement support for young farming and fishing couples running independent operations and to raise the loan ceiling for agricultural startup financing.

The government said it will not stop at these measures, pledging to continue identifying and removing institutional barriers that discourage marriage.