The amendment bills related to the relaxation of the Reconstruction Excess Profit Recovery System (재초환) and the abolition of the mandatory residence requirement for apartments under the price ceiling system have been stalled in the National Assembly for several months, pushing the issue into the second half of the year.
According to the National Assembly and the Ministry of Land, Infrastructure and Transport on the 2nd, the Land, Infrastructure and Transport Committee plans to hold a subcommittee meeting on land-related bills this month to discuss real estate regulation relaxation bills.
Regarding mandatory residence, the current law requires occupants of housing subject to the price ceiling system to continuously reside for 2 to 5 years from the initial move-in date, aiming to block speculative demand and supply housing centered on actual demand. However, there have been criticisms that this restricts buyers from choosing residences that suit their circumstances or forces them to rent out the property through monthly or yearly leases due to difficulties in securing the remaining payment.
In response, the government announced plans to ease restrictions on resale of pre-sale rights and abolish the mandatory residence requirement in the January 3rd real estate measures this year, and proposed amendments to the Housing Act and its enforcement decree in February.
However, currently only the resale restriction has been eased from a maximum of 10 years to 3 years. In the case of Olympic Park Foreon in Gangdong-gu, Seoul (Dunchon Jugong reconstruction), where resale will be possible by the end of this year, if the mandatory residence requirement is not abolished, the easing of resale restrictions shortened from 8 years to 1 year will become meaningless.
Yoon Ji-hae, head of the research team at Real Estate R114, said, "Actual demand buyers such as one-homeowners do not worry about the mandatory residence period, and even if they rent out due to financial difficulties, it cannot be seen as speculation such as gap investment. The mandatory residence requirement should be viewed as conflicting with resale restrictions and must be lifted through discussions in the National Assembly." She added that the metropolitan area has already been reorganized around actual demand buyers.
Discussions on the amendment to the "Act on the Recovery of Excess Reconstruction Profits" (재초환법), which includes measures to ease reconstruction charges, have been overshadowed by urgent issues such as support for victims of lease fraud. Although maintenance project associations have held rallies, the passage of the bill remains uncertain.
The amendment bill to the 재초환법 was introduced by Kim Jeong-jae, a member of the People Power Party, as the main proposer in November last year. The amendment aims to relax the exemption criteria for reconstruction charges per association member from the current 30 million KRW or less to 100 million KRW or less. The target was to expand the charge application range from the original 20 million KRW to 70 million KRW, but due to opposition from the opposition party, the government adjusted it to 40 million KRW.
The government had set a goal to complete the amendment work within the first half of this year. However, the delay and the upcoming general election in April next year have led to market uncertainty about whether proper discussions will take place. Some also express concerns about disruptions in housing supply.
Ham Young-jin, head of the Big Data Lab at Zigbang, said, "Given various economic issues such as high interest rates and rising raw material prices, it is difficult to see the 재초환 issue alone as causing significant disruptions in supply. It is necessary to observe the National Assembly discussions."
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