[Asia Economy Reporter Yoo In-ho] Public and private housing supply will continue in the new year.
Despite the government's strong real estate regulations, it is a good opportunity for non-homeowners, especially those in their 30s, to purchase their own homes. Wise investment is required more than ever at times like this. This is because understanding real estate-related policies well allows for investments that suit one's financial situation.
Above all, it is important to note that if a person who has taken out a Jeonse (key money deposit) loan purchases a house exceeding 900 million KRW, the Jeonse loan will be recalled. This is because measures to prevent gap investments using Jeonse loans will be implemented starting in January.
If a person who has taken out a Jeonse loan purchases a house exceeding 900 million KRW or owns two or more houses, the Jeonse loan will be recalled. For owners of one house exceeding 900 million KRW, public Jeonse guarantees and Seoul Guarantee Insurance guarantees will no longer be available.
Acquisition tax rates will also be strengthened. When purchasing a house priced between 600 million KRW and 900 million KRW, the acquisition tax rate will be segmented from the current 2% to between 1.01% and 2.99%, depending on the acquisition amount. If a household owning three or more houses purchases an additional house, a 4% acquisition tax rate will apply.
The reporting period for actual transaction prices will also be shortened. Starting February 21, the real estate transaction reporting deadline will be reduced from 60 days to 30 days. In cases where contracts are invalidated or canceled, reports must be submitted within 30 days from the date the cancellation is confirmed. Failure to comply may result in a fine of up to 5 million KRW.
From March, funding plans will also be scrutinized during housing transactions. When acquiring houses priced over 300 million KRW in speculative overheated districts, as well as houses over 300 million KRW in regulated areas and houses over 600 million KRW in non-regulated areas, a funding plan must be submitted. The government's intention is to ensure transparency in funding plans and to eradicate abnormal speculative demand.
The private land price ceiling system, which has been an issue since last year, will be fully applied to complexes that submit resident recruitment announcements after April 29, 2020, following a grace period. Resale restrictions of 5 to 10 years and mandatory residence for 2 to 3 years will also be enforced.
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