Announcement on Timing of Real Residence Obligation for Land Transaction Permission Zone Occupancy Rights to Be Made Soon

Timing for Enforcing Actual Residence Requirement for Subscription Rights Specified
Deadline for Disposing of Existing Homes Under Review at 6 Months
Since Expansion, 12 Transactions in Gangnam District, 3 in Songpa District

The Ministry of Land, Infrastructure and Transport (MOLIT) and the Seoul Metropolitan Government are set to announce soon the timing for applying the actual residence obligation for redevelopment and reconstruction housing subscription rights in land transaction permission zones, as well as the deadline for disposing of existing homes.

According to MOLIT on the 15th, Seoul requested a legal interpretation from MOLIT regarding the actual residence obligation for housing subscription rights in land transaction permission zones and the deadline for handling existing homes, and MOLIT is currently reviewing the related matters.

Seoul plans to distribute operational guidelines on the actual residence obligation for housing subscription rights in land transaction permission zones as soon as it receives MOLIT’s response to the inquiry.

MOLIT considers that housing subscription rights, which are the rights of redevelopment and reconstruction association members to move into new apartments, are also subject to land transaction permission. Under the current Real Estate Transaction Reporting Act, contracts aimed at acquiring land ownership in permission zones are explicitly subject to permission.

When purchasing a housing subscription right, the timing for fulfilling the actual residence obligation is likely to be after the approval of use. This is because it is difficult to fulfill the residence obligation in areas where demolition is imminent after the approval of the management disposition plan.

There is also consideration of a plan where apartment housing subscription right buyers specify the expected move-in time and actual residence plan in the land use plan when applying for land transaction permission, make a commitment, and then receive permission.

MOLIT is also reviewing a plan to unify the deadline for disposing of existing homes, which varies by autonomous district, to "6 months." Currently, for homeowners purchasing homes within land transaction permission zones, the disposal deadlines differ: 1 year in Gangnam and Songpa districts, 6 months in Seocho district, and 4 months in Yongsan district.

An MOLIT official explained, "Since it is difficult to reside immediately with redevelopment and reconstruction housing subscription rights, actual residence should begin from the time it is possible to move in. There are various cases, so we are reviewing them. We are considering multiple factors to operate flexibly rather than with rigid standards, and will also consult with the Seoul Metropolitan Government."

A Seoul official stated, "At this point, the timing for applying the actual residence obligation and the timing for disposing of existing homes have not been decided. Once we receive a response from MOLIT, we will finalize and announce the guidelines."

Since the expansion of land transaction permission zones to include the three Gangnam districts and Yongsan district took effect on the 24th of last month, apartment sales transactions have sharply declined.

According to the MOLIT real transaction disclosure system, from the 24th of last month to the 15th of this month, the reported apartment sales transactions were 12 in Gangnam district and 3 in Songpa district.

Among these, a 208㎡ unit in Apgujeong Hanyang 4th complex was sold for 8.5 billion KRW on the 3rd, setting a new record price. On the 27th of last month, the same size unit was traded for 8.2 billion KRW.

In Daechi Eunma, three transactions of 76㎡ units were recorded: 3.07 billion KRW (March 25), 3.02 billion KRW (March 29), etc. This is about 500 million KRW lower than the highest price of 3.55 billion KRW recorded on the 21st of the same month.

There were no transactions during this period in Seocho and Yongsan districts. Considering that the usual reporting period for apartment transactions is 30 days, the number of reported transactions may increase.