Residential officetels also included in housing pension eligibility
Housing pension subscription limit changed from market price 900 million KRW to official price 900 million KRW
[Asia Economy Reporter Park Sun-mi] A bill to ease the upper limit of house prices eligible for the Housing Pension from the current market price of 900 million KRW to the official assessed price of 900 million KRW is passing the National Assembly. Since the range of house prices eligible for the Housing Pension was expanded from 600 million KRW to 900 million KRW in October 2008, the housing price standard has not changed. With the upward revision, it is expected that more households will be included in the eligible range.
According to political and financial circles on the 24th, at the full meeting of the Political Affairs Committee held at the National Assembly in Yeouido on the 25th of this month, a bill to amend the Korea Housing Finance Corporation Act, which includes residential officetels in the Housing Pension target and changes the upper limit of Housing Pension subscription from a market price of 900 million KRW to an official assessed price of 900 million KRW, will be put to a vote.
The office of Kim Byung-wook, the ruling party secretary of the National Assembly Political Affairs Committee from the Democratic Party of Korea, stated, "At the first subcommittee meeting for bill review of the Political Affairs Committee held earlier, several bills to amend the Korea Housing Finance Corporation Act proposed by various lawmakers were discussed, and the contents jointly proposed by Representative Kim and Shim Sang-jung of the Justice Party were merged and passed."
At the first subcommittee meeting for bill review held on the 22nd, bills to amend the Korea Housing Finance Corporation Act, proposed with slightly different contents by Kim Byung-wook, Park Sung-joong, and Shim Sang-jung, were intensively discussed. Although the contents differ slightly, the purpose is the same: to relax the eligibility requirements so that more people can subscribe to the Housing Pension and enjoy its benefits.
Representative Kim proposed raising the eligible house price for Housing Pension subscription from the existing market price of 900 million KRW to the official assessed price of 900 million KRW, adding a trust method to the collateral acquisition method of the Housing Pension, and enabling automatic succession of the Housing Pension to the spouse after the subscriber's death.
He also proposed allowing vacant houses to be rented out to expand the base and security of Housing Pension subscribers. Representative Shim proposed a bill to allow residents of residential officetels to subscribe to the Housing Pension. Currently, residential officetels, which are quasi-housing not included as houses under the Housing Act and thus excluded from Housing Pension support, should be adjusted to be eligible housing for the Housing Pension to alleviate the housing burden of the elderly living in officetels.
The proposal by Representative Park of the People Power Party to completely remove the upper limit on house prices was discussed but ultimately not adopted.
What is the background for the momentum to ease Housing Pension subscription requirements?
The bill to ease the Housing Pension subscription requirements was also proposed in the 20th National Assembly but was not deeply discussed. However, as apartment prices have continued to rise recently, complaints have poured in that the existing Housing Pension subscription criteria do not reflect reality, leading both ruling and opposition parties to recognize the need for change.
The Financial Services Commission has also agreed with the purpose of the amendment, noting that the upper limit on house prices eligible for the Housing Pension subscription (market price of 900 million KRW) has remained unchanged for over 10 years, and that the number of households wanting to subscribe but unable to due to rising house prices has been increasing.
According to the Korea Housing Finance Corporation, the number of Housing Pension subscriptions recorded 5,124 cases from January to June this year.
It has remained stagnant annually with 10,308 cases in 2016, 10,306 in 2017, 10,237 in 2018, and 10,982 in 2019. Although the subscription age was lowered from 60 to 55 years old starting April this year, expanding the eligible range by about 1.15 million households, the actual number of Housing Pension subscriptions from April to June this year was 2,737 cases, showing little difference compared to 2,660 cases during the same period last year.
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