Jeonse Listings Shrink Amid Tax Overhaul, Leaving Both Landlords and Tenants in Confusion

[Anchor]

With tax revisions increasing the incentive for landlords who previously rented out their properties to move in themselves, anxiety is looming over the lease market. Both landlords, who must move into their homes due to tax burdens, and tenants, who need to find new Jeonse homes, are facing widespread confusion.

Here is a report by Jeon Hyeong-u.

[Reporter]

Jeonse listings in Daechi-dong, Seoul, a prominent school district, decreased by 6.3% compared to a week ago, just before the announcement of the tax revision proposal.

This appears to be driven by landlords withdrawing Jeonse listings to avoid tax burdens through owner-occupancy.

It is becoming increasingly difficult for tenants to find homes.

[Lee Han-sung / Daechi-dong Real Estate Agent : Moving out and finding another Jeonse here will not be easy for you. Prices have risen by 300 million to 400 million won now. Those trying to move must be having deep concerns. There are no Jeonse listings.]

Compared to a month ago, Jeonse listings dropped by 18.6% in Daechi-dong, Gangnam-gu; 13% in Jamsil-dong, Songpa-gu; and nearly 10% in Gongdeok-dong, Mapo-gu. Jeonse supplies in major areas of Seoul that have recently decreased are expected to become even scarcer.

[Park Won-gab / Senior Real Estate Specialist, KB Kookmin Bank : There is room for the Jeonse market to become somewhat unstable in areas densely populated with high-priced homes, and the number of tenants choosing semi-Jeonse or monthly rent due to excessively high Jeonse prices is also expected to increase.]

Landlords who issued eviction notices and suddenly have to make plans for owner-occupancy are also placed in an awkward position.

In particular, the "goodwill landlord" system—which exempted landlords from the 2-year residency requirement for long-term holding special deductions on capital gains tax if they raised rents by less than 5%—is being abolished, and the capital gains tax heavy taxation exclusion benefits for registered rental business operators will also disappear.

If they do not sell their homes by next year, they will bear the full brunt of the tax burden, yet transactions are not easy due to land transaction permission zones and loan regulations.

[Mr. A / Rental Business Operator : I haven't been able to fully receive rent for 10 years, nor could I move in. Why on earth did I keep holding onto that house with such anxiety?]

The Korea Housing Landlords Association argued that "abolishing the capital gains tax special taxation exception promised by the state is retroactive legislation with unconstitutional elements, and a policy that also threatens the housing stability of tenants," urging a complete reconsideration of the tax revision proposal.

(Photo: Yonhap News)
(Video Reported by Lim Woo-shik | Video Edited by Kim Jin-won)
※ Please note: This article was translated by AI and may contain errors.