[6·17 Real Estate Measures] Seoul Reconstruction Apartments Require 2 Years Residency for Move-in Rights

[Asia Economy Reporter Yoo In-ho] Starting next year, to receive apartment occupancy rights in reconstruction complexes located in speculative overheated districts that newly obtain association establishment approval, residents must have lived there for more than two years.

The area around Jamsil Sports Complex was designated as a land transaction permission zone on the 17th, imposing strict restrictions on transactions.

Additionally, if a mortgage loan is taken within regulated areas, a move-in obligation within six months will be imposed, significantly strengthening loan regulations. Recently, the western part of the Seoul metropolitan area and Daejeon and Cheongju, where housing prices have surged, are largely designated as adjustment target areas and speculative overheated districts.

The Ministry of Economy and Finance, the Ministry of Land, Infrastructure and Transport, and the Financial Services Commission held a meeting of related ministers at the Seoul Government Complex on the morning of the 17th and announced the "Management Plan for Housing Market Stabilization" containing these measures. This is the twenty-second real estate policy since the Moon Jae-in administration.

This measure focuses on blocking gap investment (purchasing homes with jeonse deposits), which was pointed out as a cause of recent housing price increases. According to the plan, the government and Seoul City will designate the Jamsil MICE development project site, Yeongdong-daero complex development project site, and surrounding areas as land transaction permission zones this afternoon. Once designated as a land transaction permission zone, buyers must reside in the apartment for two years after purchase.

The qualification for housing allocation for reconstruction association members will also be strengthened. Starting as early as next year, in reconstruction complexes in the Seoul metropolitan speculative overheated districts that receive association establishment approval, only members who have resided for more than two years can receive new apartment allocation rights.

Also, in all regulated areas, if a mortgage loan is taken to purchase a house, the buyer must move in within six months regardless of the housing price. When purchasing a newly built apartment priced over 300 million KRW in a speculative overheated district, jeonse loan guarantees will be restricted, and if a jeonse loan is taken and then an apartment priced over 300 million KRW in a speculative overheated district is purchased, the jeonse loan will be immediately recalled.

The regulated areas where loan and subscription qualifications are restricted will be significantly expanded. All areas of the Seoul metropolitan area except the northern border region have been designated as regulated areas. Cheongju and Daejeon, where housing prices have recently surged, are also included as adjustment target areas.

Speculative overheated districts now include Suwon and Seongnam Sujeong-gu in Gyeonggi Province, Anyang, Danwon-gu in Ansan, Guri, Gunpo, Uiwang, Suji and Giheung in Yongin, Dongtan 2 in Hwaseong, Yeonsu-gu, Namdong-gu, and Seo-gu in Incheon, and Dong-gu, Jung-gu, Seo-gu, and Yuseong-gu in Daejeon.

Taxes on housing investment through corporations will also be strengthened. The additional tax rate when a corporation sells a house will be raised to 20%, and the additional tax rate will also apply to houses registered for long-term lease of eight years or more by corporations after the 18th of this month.

The comprehensive real estate tax deduction for houses owned by corporations will be abolished, and comprehensive real estate tax will be imposed on newly leased houses in adjustment target areas held by corporations. Housing sales and rental businesses, whether individuals or corporations, will not be able to receive mortgage loans in any area.

The government will also strengthen investigations into actual housing transactions by collecting and analyzing funding plans for all housing transactions in speculative overheated districts or adjustment target areas, and will require supporting documents for funding plans for all housing transactions in speculative overheated districts.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki said, "Under the principles of eradicating speculative demand and protecting new demanders, we will additionally designate regulated areas and consider designating land transaction permission zones near development prospects. We will continue to closely monitor real estate market trends and actively respond to market instability factors by promptly implementing this measure to the fullest extent."