"Houses With Tenants Listed at 800 Million Won"... Are Multi-homeowners Finally Moving? Hopes Rise on Owner-occupancy Deferral [Real Estate AtoZ]

Government Finalizes Supplementary Measures on Heavier Capital Gains Tax for Multi-Homeowners
"More Multi-Homeowner Listings Expected After the Holidays"

On the 10th, after the government mentioned a supplementary measure to defer the owner-occupancy requirement for up to two years when there is a tenant, multi-homeowners who own properties with tenants, so-called "houses with tenants," also began to move.

On this day, in Seongbuk-gu, Seoul, a 59.98㎡ unit in Gireum Hyundai, with a lease period remaining until next year, was listed for sale at 800 million won. A certified real estate agent in the area said, "A house with tenants owned by a multi-homeowner came on the market this morning," adding, "I think landlords will start putting properties on the market in earnest after the Lunar New Year holidays."

Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol stated at a Cabinet meeting that day, regarding the supplementary measures for the temporary suspension of heavier capital gains tax on multi-homeowners, "If there is a tenant, the owner does not need to live in the property during the contract period and can move in after the contract ends," and added, "Taking the lease period into account, we will allow this within a maximum of two years."

Accordingly, when a home without an owner-occupier is purchased by a person without a home, the owner-occupancy requirement will be deferred until the tenant's lease expires. However, the condition is that the buyer must move in within a maximum of two years. The deferment period for the owner-occupancy requirement is based on the date of the enforcement decree amendment announcement, not the end date of the temporary suspension of heavier capital gains tax. Experts noted that, as conditions are now in place to allow purchases with a Jeonse lease in place, this will also help strengthen buying demand.

A notice for a quick sale is posted in front of a real estate agency in Gangnam-gu, Seoul. Yonhap News

Market expects more "houses with tenants" for sale... Seoul apartment listings exceed 60,000

Following the government announcement, inquiries about "houses with tenants" have also been increasing in the market. Industry officials predict that, starting from the Lunar New Year holidays, multi-homeowners will begin listing properties in earnest. A certified real estate agent in Yangcheon-gu said, "We are getting many inquiries asking whether there are properties with tenants. I think more such properties will come out after the Lunar New Year holidays," adding, "How much Jeonse is attached differs from house to house, so for now it seems better for buyers to hold cash and wait."

With President Lee Jaemyung pressing multi-homeowners to dispose of their properties and the supplementary measures being announced, the number of Seoul apartment listings is also increasing at a faster pace. According to real estate platform Asil, as of this day, there were 60,417 apartment sale listings in Seoul, an increase of 276 in three days since the number surpassed 60,000 on the 7th.

Compared with the beginning of the year (57,001 listings), this is an increase of 5.9%, and compared with January 23, when President Lee mentioned the end of the temporary suspension of heavier taxation on multi-homeowners, it is an increase of 7.4%. The district with the most listings is Gangnam-gu (8,405). Seocho-gu (6,981), Nowon-gu (4,559), and Songpa-gu (4,272) follow.

Han River waterfront apartment complex viewed from Lotte World Tower in Songpa-gu, Seoul. Yonhap News

Likely to support buying demand

Experts predict that if "houses with tenants" come onto the market, this will also help support buying demand. On the ground, there has been a widespread sense of stagnation in which listings appear but do not lead to transactions because buying demand has not formed sufficiently. This is because, under lending regulations, only those with substantial cash can afford to buy.

Ham Youngjin, head of Woori Bank Real Estate Research Lab, said, "Although it is a land transaction permission zone, there is now an issue where, until the tenant moves out, buyers can purchase with a Jeonse lease in place for up to two years, which will help some transactions."