MOLIT and Seoul City Announce Guidelines for Land Transaction Permit Zones
Redevelopment Residency Rights Considered Equivalent to Apartment Ownership
Permits Allowed Even for Existing Homeowners... Must Sell Within Six Months
To purchase redevelopment residency rights in Gangnam, Seocho, Songpa, or Yongsan districts of Seoul?areas designated as land transaction permit zones?buyers must obtain approval from the relevant district office. If the redevelopment or reconstruction housing has already been demolished, it is possible to receive a land transaction permit simply by submitting a written commitment to reside in the new apartment for two years from the time of occupancy after the new building is completed.
The Ministry of Land, Infrastructure and Transport (MOLIT) announced on the 21st that, in response to Seoul City's measure designating all apartments in Gangnam, Seocho, Songpa, and Yongsan districts as land transaction permit zones from March 24 to September 30, it has established criteria for permit procedures in consultation with the city and each district office. This is the first time in five years that MOLIT has announced standards for handling land transaction permits, following the designation of Jamsil, Samseong, Daechi, and Cheongdam areas in 2020.
First, those who purchase an apartment within a land transaction permit zone must reside there for two years from the date of purchase. However, considering the typical transaction process?which includes permit application, approval, contract, final payment, and registration?and usually takes about four months, moving in within four months of the permit date is considered to satisfy the residency requirement.
If there are unavoidable circumstances, a grace period for moving in may be granted. MOLIT stated, "If there are legitimate reasons for being unable to complete the acquisition or move-in, a grace period may be considered."
Individuals who already own a home may also apply for a permit to purchase a new property. However, the intent to reside must be clear, and a plan to dispose of the existing property must be submitted together. Taking into account the general procedures for selling or leasing, MOLIT explained that "if there is a plan to dispose of the existing home within six months, a permit may be granted."
Residency rights for redevelopment or reconstruction are considered "rights that effectively allow the acquisition of apartment ownership" and are therefore subject to land transaction permits. Even if the property is still in the form of a multiplex before demolition, if the residency right has received management disposition approval, a land transaction permit is required.
On the other hand, initial sales rights supplied directly by construction companies are not subject to permit requirements. However, if these rights are resold to a third party, a permit is required.
To purchase a sales right or obtain a redevelopment or reconstruction residency right, a "two-year residency commitment" is necessary. The permitting authority will check the construction schedule and possible move-in date, and will only issue a permit if the intent to reside is clear.
If the building has already been demolished, a commitment to reside for two years after moving in is required. If the buyer resided in the property for one year before demolition, fulfilling the remaining one year after moving in is sufficient to meet the residency requirement. In redevelopment or reconstruction zones where the property has been demolished after receiving management disposition approval, a commitment to reside for two years from the time of occupancy in the new apartment is sufficient to obtain a transaction permit.
MOLIT plans to conduct a usage status survey for permits issued within Gangnam, Seocho, Songpa, and Yongsan districts. A MOLIT official stated, "We will thoroughly inspect compliance with land use obligations."
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