Follow-up to 8·8 Measures... LH Announces Project Operator Recruitment
80% Monthly Rent Support for Newlyweds, Remaining as Dundeun Jeonse
Purchasing Apartments in Transit Areas and Medium-Sized Units
Possible Sale Conversion After 6 Years... Additional Lease Guarantee
The purchase procedure to supply an additional 17,000 newly built rental housing units in the metropolitan area has begun. Korea Land and Housing Corporation (LH) announced a call for business operators on the 14th to secure newly built rental housing units.
This announcement is a follow-up measure to the "Plan to Expand Housing Supply for National Housing Stability" announced at the 8th Real Estate Ministers' Meeting on the 8th. The government decided to focus on supplying 110,000＋α newly built rental housing units in the metropolitan area by next year. This is an increase of about 20,000 units from the existing supply target of 90,000 units, and the announcement was made to fill this volume.
LH plans to purchase mainly medium-sized apartments located in areas such as station zones, considering the preferences of actual demanders. Additionally, from the contract signing stage to completion, housing quality will be thoroughly managed five times, and a construction cost-linked purchase price method will be introduced to encourage the use of high-quality construction materials despite rising construction costs.
Participating businesses will receive benefits such as tax relief and financial support. Even if private corporations acquire demolished houses to build quasi-housing such as residential officetels as newly built rental housing, the acquisition tax will not be subject to the heavy tax rate (12%) but will apply the basic tax rate (1~3%). Currently, acquisition tax heavy taxation exemption applies only when a corporation demolishes a house and builds a ‘house’ in terms of use.
Also, if private businesses subscribe to the Housing and Urban Guarantee Corporation (HUG) project financing (PF) loan special guarantee, they can receive low-interest loans from first-tier financial institutions up to 90% of the total project cost. The plan is to establish a one-stop support system linking purchase commitment (LH) - special guarantee (HUG) - dedicated bank loans. Furthermore, LH will provide advance payment support (70%) when securing land for businesses, accept applications anytime, and reinforce additional personnel.
According to the Ministry of Land, Infrastructure and Transport, this additional purchase volume will mainly be supplied to newlywed couples and households with newborns residing in the metropolitan area. Of the 17,000 units, 13,600 units (80%) will be supplied to newlywed couples in the form of monthly rent, and the remaining 3,400 units will be supplied as Dundeun Jeonse Housing (public jeonse). By region, there will be 5,000 units in Seoul, 3,000 units in Incheon, and 9,000 units in Gyeonggi Province.
All units can be converted to sale at least 6 years later, and the sale price will be set at half the sum of the appraised value at move-in and the appraised value at sale. If the resident does not wish to convert to sale, Dundeun Jeonse Housing guarantees an additional 2-year lease period, and the newlywed couple type guarantees an additional 4-year lease period. Detailed move-in criteria will be separately prepared according to the type of jeonse or monthly rent.
Lee Gi-bong, Director of Housing Welfare Policy at the Ministry of Land, Infrastructure and Transport, said, "In a situation where the supply of non-apartment housing such as villas has shrunk, we plan to further expand the newly built rental housing project so that high-quality housing in urban areas can be supplied quickly," and added, "We will actively cooperate with local governments and related organizations."
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