The South Korean government is set to implement an expansion of the residency exemption for purchasing homes with tenants in land transaction permission zones.
On May 22, the Ministry of Land, Infrastructure and Transport announced that a revised enforcement decree of the Real Estate Transaction Reporting Act, which broadens the scope of the residency exemption to include all homes with tenants, will be published and take effect on May 29.
This revision follows the announcement made on May 12 regarding the expansion of the residency exemption for homes with tenants. The focus is on reducing transaction difficulties for homes with tenants while limiting speculative demand. In land transaction permission zones, the principle is that homeowners must reside in the property after acquisition; however, there have been instances where transactions were hindered due to existing rental contracts preventing immediate occupancy by buyers.
To qualify for the residency exemption, applicants must submit their land transaction permission requests by December 31 of this year. Sellers must be owners of homes that were rented out or had lease rights established as of May 12.
Buyers must have maintained a status of being without a home since May 12, with the criteria assessed on a household basis. After receiving permission, they must acquire the property and complete registration within four months.
The exemption period lasts until the end of the initial lease contract established on May 12, but buyers must move in for residency by May 11, 2028, at the latest.
Sellers and buyers wishing to apply for the residency exemption while trading homes with tenants can do so by meeting these requirements and submitting their land transaction permission requests to the relevant authorities starting May 29.
Minister Kim Yoon-deok stated, "This measure aims to resolve equity issues arising from the residency exemption implemented on February 12. We will address the fact that the previous measures only applied to certain multi-homeowners."
He added, "We are implementing the residency exemption under the principle of prohibiting gap investments. Similar to the measures from February 12, we are maintaining policy consistency by limiting buyers to those without homes and allowing a maximum residency exemption period of up to two years from the announcement date."
* This article has been translated by AI.
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