Government to Extend Grace Period for Actual Residency Obligation... Will Transactions for Homes with Tenants Increase?

[Anchor]

The government has decided to extend the grace period for the actual residency obligation applied when purchasing a house with a tenant in land transaction permission zones by another year, through the end of next year.

Jeonse and monthly lease contract renewals have also been included in the grace period. Reporter Lee Seong-hoon explores whether this measure can provide breathing room to the lease market and lead to an actual increase in transaction volume.

[Reporter]

An apartment complex in Gangnam, Seoul.

Recently, a multi-homeowner gave up on trying to sell an apartment with a dedicated area of 59 square meters.

Under the rules for land transaction permission zones, buyers must move in within four months in principle, but there were circumstances where the tenant could not move out.

The homeowner even offered tens of millions of won in moving expenses, but eventually pulled the property off the market.

[Real Estate Agent in Gangnam-gu, Seoul: If there was one year or two years left on the tenant's lease, they simply could not meet the requirement, so many owners gave up on the sale altogether.]

To ease these transaction restrictions, the government had previously allowed actual residency to be postponed until the end of this year if the lease period remained. Now, it has extended this grace period by one year through the end of next year.

It has also been decided to recognize tenant contract renewals once for up to an additional two years.

Based on the implementation date of October 1, actual residency can be postponed for up to a total of 3 years and 3 months by combining existing and renewed contracts.

This follows criticism that housing sales could emerge as tax burdens continue to grow next year and the year after due to the August 3 tax overhaul, and transactions should not be blocked solely because of the actual residency obligation.

Previously, the ruling party also suggested that an additional grace period for actual residency is necessary to stabilize tenants' housing stability and the lease market.

[Kim Kyu-jung, Real Estate Expert Advisor at Korea Investment & Securities: There is a possibility that moves to sell properties due to tax pressure may increase slightly compared to now. Since gap investments for close to three years at most will effectively become possible, the significance of the actual residency obligation through the land transaction permission zone system may become somewhat diluted...]

However, it is expected that transactions will not surge immediately, as it is difficult for real demand buyers to actively purchase homes where they have to wait more than a year to move in, and other restrictive factors such as loan regulations and high housing prices still remain.

(Video Editing: Nam Il, VJ: Jeong Han-wuk)
※ Please note: This article was translated by AI and may contain errors.