The 'Housing Act Amendment' that abolishes the actual residence obligation for houses subject to the price ceiling system has once again been stalled at the subcommittee of the National Assembly's Land, Infrastructure and Transport Committee.
Seoul Gangdong-gu Olympic Park Foreon (Dunchon Jugong Apartment Reconstruction) site view / Photo by Yonhap News
On the afternoon of the 21st, the National Assembly's Land Committee held a Land Law Review Subcommittee meeting to discuss the Housing Act amendment but was unable to reach a conclusion and postponed the agenda. President Yoon Seok-yeol presided over the Cabinet meeting on the 19th and urged, "Please expedite discussions so that the amendment can be processed during this extraordinary session of the National Assembly."
Some expected that the meeting might find a compromise centered on the proposal by Kim Jeong-jae, a member of the People Power Party, which maintains the actual residence obligation but only requires fulfilling it until the house is disposed of. However, due to unresolved disagreements among opposition party members, the bill's processing was postponed.
The actual residence obligation is a regulation requiring occupants of houses under the price ceiling system to reside there personally for 2 to 5 years from the initial move-in date. It was introduced in 2021 to block speculative demand and promote housing supply focused on genuine demand. Violations, such as renting out the house to pay the balance or selling it, can result in up to one year of imprisonment or a fine of 10 million won.
Criticism has been raised that this obligation hinders beneficiaries from choosing a residence suitable to their circumstances or renting out the property when they have difficulty raising the balance. Moreover, as the housing market froze in the second half of last year, the government announced plans in January this year to ease resale restrictions and abolish the actual residence obligation. Subsequently, amendments to the Housing Act and enforcement ordinances were proposed in February but remain pending in the National Assembly amid opposition concerns that abolishing the actual residence obligation could encourage so-called 'gap investment.'
The Land Committee plans to hold one more subcommittee meeting within the year to review the amendment, but with the general election scheduled for April next year, accountability issues may be highlighted, making it difficult to reach a conclusion easily.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
