Should Couples Delay Marriage Registration for Financial Benefits?

A couple planning to marry in the second half of next year has decided to hold their wedding ceremony but postpone their marriage registration. This decision is influenced by the income requirements for the government-backed housing loan program, Bogumjari Loan. Unmarried individuals can apply if their annual income is below 70 million won, but married couples must meet a combined income limit of 85 million won. Since both partners work, the couple would exceed this income threshold upon registering their marriage.

They also considered the financial burden of not being able to access policy loans. Since July 7, the basic interest rate for the Aki-e Bogumjari Loan ranges from 4.90% to 5.20%, depending on the term. In comparison, the couple found a market bank mortgage loan with an interest rate of 6.37%. For a principal of 240 million won, this results in an annual interest difference of approximately 3.53 million won. While the actual burden varies based on loan terms, repayment methods, and preferential rates, the decision to register their marriage could significantly impact their financial costs.

Many couples, like this one, are choosing to delay their marriage registration after holding their wedding ceremony. This is often due to the combined income and debt assessments that could disqualify them from certain policy loans or housing support programs.

According to statistics from the National Data Agency, among the 240,326 couples who registered their marriage last year, 47,096 couples, or 19.6%, registered after being married for over a year. This percentage has increased from 12.8% in 2020 to 19.6% last year, reflecting a growing trend.

Marriage registration has become more than just an administrative procedure; it now affects loan limits, housing subscription eligibility, and tax implications. Couples preparing for marriage should carefully consider their individual incomes, debts, housing history, and plans for homeownership and childbirth when deciding when to register their marriage. Delaying registration is not always advantageous, as benefits available after marriage may outweigh the costs.

If a couple's combined income exceeds the policy loan criteria, delaying marriage registration may be beneficial. Notable products include the Didirim Loan for home purchases and the Bogumjari Loan, as well as the Buteumok Loan for rental support.

The Didirim Loan has a combined income limit of 60 million won for general households, 70 million won for first-time homebuyers with two or more children, and 85 million won for newlyweds. The newlywed-specific Buteumok rental loan is available for households with a combined income of 75 million won or less. Before marriage, only one partner's income is considered, but after marriage, the combined income could exceed the limits.

First-time homebuyer benefits also vary by product. The first-time Bogumjari Loan requires that neither partner has a history of homeownership. If one partner has previously owned a home, the other may not qualify for the first-time Bogumjari Loan after marriage registration.

The general Bogumjari Loan allows for a maximum of 360 million won, while first-time buyers can access up to 420 million won. The loan-to-value ratio (LTV) for first-time buyers can be as high as 80%, affecting their borrowing capacity. However, limits may differ for properties in regulated areas or metropolitan regions.

Housing subscriptions have different criteria than policy loans. If a spouse has previously owned a home or has a history of winning a housing subscription, it does not restrict the applicant's eligibility for newlywed or first-time special allocations, as the system has been improved. Therefore, it is not always advantageous to delay marriage registration based solely on one partner's past homeownership.

Conversely, for dual-income couples looking to purchase a more expensive home than what policy loans cover, registering their marriage may be beneficial for combining incomes. Including a spouse as a co-borrower in bank mortgage assessments can increase borrowing capacity compared to evaluating only one partner's income.

The debt service ratio (DSR) measures the proportion of annual income that goes toward repaying loans. While increased income can raise borrowing limits, existing loans from the spouse are also considered, so the actual benefits vary by couple.

Couples planning to have children should also consider newborn special loans. The eligibility for these loans depends on whether the couple has given birth or adopted within two years of the loan application date, rather than their marriage registration status. The newborn special Didirim Loan supports up to 400 million won for homes priced below 900 million won, while the newborn special Buteumok Loan offers up to 240 million won for homes priced below 500 million won in metropolitan areas. Dual-income households can apply if their combined income is below 200 million won.

For couples without homes preparing for housing subscriptions, registering their marriage may provide eligibility for newlywed special allocations. This program targets households without homes that have been married for seven years or less. Recently, opportunities for special allocations have also expanded for households with children under two years old.

However, the eligibility period for newlywed special allocations begins from the date of marriage registration. If immediate funding for housing is challenging or if the desired location's supply plans are distant, couples should consider both the timing of their registration and their financial readiness.

If each partner owns a home, the joint registration benefit may also be an advantage. Although they may temporarily become dual homeowners upon marriage, selling one property within ten years of marriage can qualify for single-home status under certain conditions. Gains up to 1.2 billion won can be tax-exempt, provided the property has been held for at least two years.

Ultimately, the advantages and disadvantages of marriage registration cannot be determined by a single criterion. If policy loans are needed, couples should assess their combined income and housing history, while those considering bank loans must evaluate both partners' incomes and debts. They should also consider their housing subscription plans, childbirth intentions, and the timing of selling any existing properties.

Seoji Yong, a professor at Sangmyung University, stated, "The root of the marriage penalty lies in outdated system designs that aggregate income and assets at the household level, failing to reflect the realities of dual-income households and housing costs. In the future, policies should be designed to minimize losses or ideally generate slight gains from marriage and childbirth by simulating taxes, loans, and housing subscriptions based on individual circumstances, life cycles, and regional housing costs."