LH to Purchase Additional 10,000 Non-Apartment Units for Supply as 'Dundeun Jeonse' and Purchased Rental Housing

Up to 8-Year Lease at 90% of Surrounding Jeonse Prices

Korea Land and Housing Corporation (LH) will purchase an additional 10,000 non-apartment units such as villas beyond the original plan and supply them as Dundeun Jeonse Housing and purchase rental housing.

On the 25th, LH announced that it will additionally purchase a total of 10,000 newly built purchase rental houses within the year, including 5,000 Dundeun Jeonse Housing units and 5,000 newly built purchase contract units. This means an increase of 10,000 units from the previously announced supply plan of 23,000 units. This additional purchase volume will be supplied to newborn and multi-child households, newlyweds, and youth to respond to low birth rates and support youth independence.

Dundeun Jeonse Housing is a newly introduced type this year, rented for up to 8 years in the form of Jeonse at about 90% of the market price. In particular, priority is given to multi-child or newborn households by awarding extra points during tenant selection to provide preferential move-in opportunities.

For newly built purchase contract housing, out of the additional 5,000 units, 4,000 units will be allocated to newlyweds (2,000 units) and youth (2,000 units).

Newlywed purchase rental housing allows residents to live for up to 20 years with monthly rent at about 30?50% of the surrounding market price.

Youth purchase rental housing allows residents to live for up to 6 years under conditions about 40?50% cheaper than the surrounding market price. To alleviate economic burdens, the deposit is set at around 1 to 2 million KRW.

LH will collaborate with the Housing and Urban Guarantee Corporation (HUG) to introduce HUG project financing (PF) loan guarantees to facilitate smooth financing for newly built purchase contract project operators. The HUG PF loan guarantee product provides loan guarantees to financial institutions for up to 90% of the total project cost when the operator constructs 30 or more newly built purchase rental housing units. Through this, operators can obtain loans at lower interest rates than general PF loans.

Various institutional incentives such as tax reductions and floor area ratio relaxations will also be provided to activate newly built purchase contract projects. When operators acquire land for constructing newly built purchase contract housing, the capital gains tax for landowners will be reduced by 10%, and acquisition tax borne by operators will also be reduced by 10% to support smooth acquisition of project sites. The sunset date for capital gains and acquisition tax reductions will be extended from the end of this year to the end of 2027.

Construction standards for newly built purchase contracts will also be relaxed. According to the revised "Enforcement Decree of the National Land Planning and Utilization Act" as of March 19, newly built purchase contract housing can have floor area ratio relaxations up to 120% of the legal limit according to local government ordinances. Furthermore, according to the revised "Enforcement Decree of the Public Housing Special Act" as of the 9th, if operators construct newly built purchase contract housing as station-area or small-sized (exclusive area under 30㎡) urban lifestyle housing, parking lot standards can also be relaxed. LH plans to prepare detailed application standards related to this.

Reflecting the additional purchase volume, LH will implement a headquarters integrated announcement on the 26th. Regional purchase announcements reflecting specific housing purchase standards and local conditions will follow.