Households with Annual Income of 100 Million Won Eligible for Newlywed Special Supply... First-Time Special Supply Introduced in Private Land Areas

Significant Relaxation of Income Criteria for Special Supply
Households with Income up to 140% of Average Urban Workers Can Apply
Annual Income Exceeds 100 Million Won for 4-Person Household

Introduction of First-Time Special Supply for Private Housing

Hong Nam-ki (center), Deputy Prime Minister and Minister of Economy and Finance, Kim Hyun-mi (right), Minister of Land, Infrastructure and Transport, and Jin Young, Minister of the Ministry of the Interior and Safety, are moving to announce a comprehensive real estate plan including strengthening the comprehensive real estate tax on multiple homeowners on July 10 at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Lee Chun-hee] The government is set to fully implement the expansion of subscription opportunities for people in their 20s and 30s, as proposed in the July 10 real estate measures. A special supply for first-time homebuyers will be newly introduced for private housing, and four-person households with an annual income of up to 100 million KRW will also be eligible to apply for the special supply for newlyweds. Regarding the controversy over subscription qualification discrimination against overseas dispatch workers, qualification will be recognized only if they reside alone abroad.

The Ministry of Land, Infrastructure and Transport announced that as a follow-up measure to the July 10 policy ('Supplementary Measures for Housing Market Stabilization'), partial amendments to the 'Housing Supply Regulations' and the 'Public Housing Special Act Enforcement Rules' will be implemented starting from the 29th.

From now on, four-person households with an annual income of 100 million KRW can also apply for newlywed special supply... No asset criteria

Special Supply Income Requirement Relaxation Plan for Newlywed Couples in Private Housing. (Provided by the Ministry of Land, Infrastructure and Transport)

The most notable change is the relaxation of income criteria for special supply. Previously, the special supply for first-time homebuyers was limited to those earning 100% or less of the previous year's average monthly income of urban workers, and the special supply for newlyweds was limited to 120% (130% for dual-income) of the average monthly income for private housing.

Based on this year's standards, only households with a monthly income of 8.09 million KRW or less (dual-income basis) could apply for the newlywed special supply. For the first-time homebuyer special supply, the limit was 6.94 million KRW per month for a four-person household. Especially for the first-time homebuyer special supply, there is no separate dual-income exception, making it more difficult to meet the criteria.

The government appears to have accepted criticism that many newlyweds with realistic home purchasing capacity are excluded from the income criteria unless they are 'gold spoon' families, and has significantly expanded the criteria.

For first-time homebuyer special supply in national housing, the existing standard of 100% of the average monthly income of urban workers is maintained. However, through this measure, a mandatory first-time homebuyer special supply of about 15% for public land and 7% for private land has been introduced for private housing, raising the income standard to 130%. For a four-person household, this corresponds to a monthly income of 8.09 million KRW.

The income ceiling for the newlywed special supply has also been raised from the current 100% (120% for dual-income) for public housing and 120% (130% for dual-income) for private housing. For newlywed Hope Towns with sale prices between 600 million and 900 million KRW and private housing, the income standard is raised to 130% (140% for dual-income) for first-time homebuyers only. For a four-person household, 140% of the previous year's average monthly income of urban workers is 8.72 million KRW. When calculated as annual income, this means households earning over 100 million KRW can also apply for special supply.

However, asset criteria remain at the existing level. Unlike the first-time homebuyer special supply, which requires real estate assets including land and buildings to be below 215.5 million KRW and, if owning a car, the car's value to be below 27.64 million KRW, there is no separate asset requirement for the newlywed special supply, which has sparked controversy over 'gold spoon' subscription.

There is also a possibility that these income criteria will be raised further. Minister Kim Hyun-mi of the Ministry of Land, Infrastructure and Transport recently stated in a media interview, "In the July 10 measures, income requirements for newlyweds and first-time homebuyers were relaxed," but added, "There are many cases where couples with low points but dual incomes still fail the income requirements. We plan to further relax income requirements to provide opportunities to newlyweds who face difficulties in winning the lottery."

First-time homebuyer special supply introduced for private housing as well... 4050 generation protests 'reverse discrimination'

First-Time Special Supply Expansion Plan (Provided by the Ministry of Land, Infrastructure and Transport)

Along with the increase in income criteria for special supply, the supply volume has also increased. The proportion of first-time homebuyer special supply in national housing, which was previously 20%, has been raised to 25%. For private housing, a supply of 15% for public land and 7% for private land is allocated only for units of 85㎡ or less (exclusive area), which is the size standard for national housing.

Accordingly, the total proportion of special supply, including first-time homebuyers, newlyweds, institution recommendations, multi-child families, and elderly parent support, will approach 85% for national housing, 58% for private housing on public land, and 50% for private housing on private land. Special supply will account for more than half of all housing supply types.

However, the 4050 generation (people in their 40s and 50s) is strongly protesting. The Ministry of Land, Infrastructure and Transport has repeatedly explained that "even if people in their 30s cannot receive general sales due to low points, they account for the highest proportion of winners through various special supplies," but since the announcement of these expanded proportions, there have been complaints that the 4050 generation, who have accumulated points, may suffer 'reverse discrimination.'

Institutional improvements also made regarding discrimination against overseas workers and children born in de facto relationships

In addition, the government has addressed various issues that have arisen during the subscription process through this legal amendment.

Regarding the controversy over discrimination against overseas workers caused by prioritizing subscription eligibility based on continuous residence in the local area, some corrections have been made. Currently, in speculative overheated districts in the metropolitan area, if a person has lived abroad for more than 90 consecutive days or a total of 183 days annually, they are not recognized as eligible for priority supply given to residents with more than two years of residence. However, going forward, periods during which a person resides alone abroad due to work circumstances ('single assignment') will be recognized as domestic residence.

Qualification requirements related to the special supply for newlyweds have also been improved. In January, the National Human Rights Commission pointed out that excluding children born in de facto relationships before marriage registration from eligibility is an unreasonable discrimination. Through this amendment, children born in de facto relationships before marriage registration will be recognized as children born during the marriage period for special supply eligibility.

Additionally, regarding development projects within greenbelt areas, it was pointed out that special supply regulations for negotiated transferors exist only for land development and housing site development projects, but not for public housing projects. This has been addressed. Now, negotiated transferors who are non-homeowners within public housing construction project districts can also receive special supply, and applicants will be given the option to choose.

Han Sung-soo, Director of the Housing Fund Division at the Ministry of Land, Infrastructure and Transport, said, "The establishment of first-time homebuyer special supply and the relaxation of income criteria for newlyweds will expand winning opportunities for non-homeowner actual demanders," adding, "We plan to consider further relaxing income requirements for special supply so that the increased supply from the August 4 supply plan and the 3rd new town pre-subscription can provide more opportunities to actual demand groups such as dual-income households."