South Korea will extend a grace period on move-in requirements for homes in land transaction permit zones through the end of next year, acting on a request from the ruling Democratic Party of Korea, which called at a floor leadership meeting for a longer window on the temporary easing. The requirement that buyers be non-homeowners purchasing a home to live in, along with a two-year residency obligation after moving in, remains unchanged.
The Ministry of Land, Infrastructure and Transport said on the 17th that it will extend the application deadline for the move-in grace period announced in May — a measure intended to ease transactions involving rented homes in land transaction permit zones — from the end of this year to the end of next year, and will recognize the grace period for lease renewals in addition to the current lease term.
The ministry said the measure reflects a proposal made at the ruling party's floor leadership meeting and is intended to support housing transactions amid tax changes, including the temporary easing of heavier capital gains taxes on multiple-home owners and the phased elimination of tax benefits for rental apartments purchased in areas designated for speculation controls, while also improving housing stability for tenants. A related amendment to the real estate transaction reporting law will go through public notice of proposed rules starting on the 18th and take effect Oct. 1.
Applications under the extended and expanded grace period can be filed starting on the first of next month. For rental apartments purchased in areas designated for speculation controls — registered rental housing — the application window for the grace period will be adjusted accordingly if the period for tax benefits is pushed back, for reasons such as a remaining mandatory rental term or restrictions on transferring reconstruction or redevelopment association membership in overheated speculation districts. Where the start of the tax benefit period for such apartments is pushed back because of the end of a mandatory rental term or the date of a transfer notice, applications for the grace period may be filed for 15 months from that point.
The scope of the grace period has also been widened to cover renewals. Under the May measure, move-in was deferred only for the remaining term of the current tenant's lease. Under the new measure, a renewal — limited to one, for up to two years — can also qualify, on top of the remaining term. That allows move-in to be deferred for as long as three years and three months in total, or 15 months of application window plus 24 months of renewal, with occupancy required by 2029 at the latest.
Buyer requirements and the residency obligation remain the same as under the May measure. Buyers are limited to those who have not owned a home continuously since May 12, and they must live in the home for two years after moving in. "This measure maintains the residency principle of the land transaction permit system while easing practical difficulties that arise in transactions involving rented homes and improving housing stability for tenants," First Vice Minister of Land, Infrastructure and Transport Kim Yi-tak said. "We will keep the requirements that buyers be non-homeowners purchasing a home to live in and that they reside there for two years, so that transactions center on genuine demand, while thoroughly blocking speculative demand."
