Seoul: The Democratic Party (DP) has proposed that the government extend the application period for exemptions from the owner-occupancy requirement in land transaction permit zones until next year. The government had previously eased these rules in May, but persistent side effects have led the ruling party to seek another revision just four months after the initial adjustment.
According to Yonhap News Agency, under the housing measures introduced on October 15 last year, the government designated all of Seoul and parts of Gyeonggi as land transaction permit zones. This broad regulation aimed to curb "gap investment," where buyers purchase homes using tenants' jeonse (lump-sum deposits). The regulation mandates buyers in these zones to move into their homes within four months of approval and reside there for two years. These unprecedented restrictions have led to significant side effects, making it difficult to sell homes with existing tenants, thereby suppressing transactions. Meanwhile, tenants have faced increased housing insecurity as the jeonse and monthly rental markets have tightened.
In May, the government introduced a supplementary measure allowing individuals without homes who purchase tenanted properties to postpone moving in until the existing lease expires, with applications to be accepted through the end of the year. The ruling party now proposes extending this application deadline through next year and permitting tenants to renew their leases. The DP argues that homeowners require more time to sell under the revised tax system, while tenants need greater housing stability. If accepted, the proposal could allow some buyers to postpone their owner-occupancy requirement until as late as 2031.
The repeated adjustments highlight the excessive nature of the original regulation. The government implemented an aggressive demand-suppression measure without thoroughly examining its potential side effects, leading to increased confusion in the housing market. The land transaction permit system is not the sole example of such issues. Last month, the government included provisions in its tax reform plan that significantly increased the burden on owners of a single non-occupied home. Following public backlash, revisions were submitted to the National Assembly, and now the ruling party is preparing to amend these changes as well.
Despite these repeated fixes, the underlying problem remains unsolved. It is becoming increasingly evident that regulation and taxation alone cannot address the simultaneous rise in home purchase prices, jeonse, and monthly rents-a "triple surge" across the housing market. The government and ruling party should collaborate to reconsider the fundamental direction of housing policy, rather than continuing to amend rules that create new distortions and uncertainty for both owners and tenants.