Amid Growing Backlash, Ministry of Land, Infrastructure and Transport Clarifies: "Policy Goal is Housing Stability"

Active Clarification Amid Controversy After Ultra-Strong Real Estate Measures
"Even with the Enforcement of the Lease 3 Laws, Landlords Can Move In Anytime"
"Compliant Rental Business Operators Will Not Suffer Damage"

Last year, the market capitalization of housing prices in South Korea exceeded 5,000 trillion won for the first time since statistics began in 1995. The ratio of housing market capitalization to Gross Domestic Product (GDP) also rose to the highest level ever recorded. According to the Bank of Korea on the 26th, the nominal housing market capitalization, which is the total market value of domestic housing prices at the end of last year, was 5,056.7924 trillion won, a 7.4% increase from the previous year (4,709.6118 trillion won). The photo shows an apartment view from Namsan, Seoul on the same day. Photo by Kim Hyunmin kimhyun81@

[Asia Economy Reporter Moon Jiwon] The government reiterated that even with the introduction of the 'Three Lease Laws,' landlords can refuse tenants' requests to renew contracts if they wish to reside in the leased property themselves.

As controversy arose over the Three Lease Laws excessively restricting landlords' property rights, the government is interpreted to have begun a full-scale explanation.

On the 26th, the Ministry of Land, Infrastructure and Transport released a press briefing on the Three Lease Laws, including the right to request contract renewal, the cap on rent increases, the lease reporting system, and the reform of the rental registration system.

In the briefing, the Ministry stated, "Even with the introduction of the Three Lease Laws, the government's position is that landlords should be able to reside in the property without any restrictions if they wish to live there at the time of lease contract renewal."

It further explained, "Among the proposed amendments to the Three Lease Laws currently submitted to the National Assembly, there are already bills that include 'landlord's actual residence' as a valid reason to refuse contract renewal requests."

However, the Ministry reaffirmed that the application of the Three Lease Laws to existing contracts is still being pursued.

The Ministry said, "There is a significant public interest in applying the Three Lease Laws to ongoing contracts to broadly protect tenants and prevent sudden surges in rent prices."

The Ministry added that with the introduction of the Three Lease Laws, tenants can extend their lease period if they wish (right to request contract renewal), and rent increase rates become predictable (cap on rent increases), enabling tenants to enjoy more stable housing.

After real estate measures led to a rise in jeonse prices and a disappearance of jeonse listings, the property listings at a real estate agency in an apartment in Songpa-gu, Seoul, were completely empty on the 20th. Photo by Hyunmin Kim kimhyun81@

The Ministry also stated that legitimate rental business operators will not suffer losses due to the system reform.

Previously, through the July 10 measures, the government announced the abolition of the 4-year short-term and 8-year long-term general apartment rental business systems, but for legitimate operators who have complied with obligations, the tax benefits already received will not be reclaimed, and existing tax benefits will be maintained until the registration cancellation date.

Regarding the plan to expand the mandatory rental deposit guarantee subscription to all housing, the Ministry explained that a one-year grace period will be provided after the law is promulgated.

The Ministry said, "Existing operators need preparation time to comply with the guarantee subscription obligation, unlike new operators to whom the amended Private Rental Housing Act applies immediately. Therefore, a one-year grace period will be set after the law amendment, and from the time lease contracts are renewed or tenants change thereafter, guarantee insurance subscription will be applied."

The Ministry also clarified again the controversy over retroactive application of loan restrictions raised after real estate measures.

The Ministry emphasized, "Due to loan regulations in real estate measures, those without homes or with one home under disposal conditions will not have their mortgage loan limits reduced nor be subject to retroactive application."

However, a clear line was drawn regarding multi-homeowners.

The Ministry stated, "Multi-homeowners can still obtain loans within the range borrowed before the designation of regulated areas even after the designation."

Regarding claims that holding taxes have significantly increased even for one-homeowners due to government policies, the Ministry reiterated its previous position that "the increase in holding tax burden due to this measure is limited to multi-homeowners."

The Ministry explained, "The increase in comprehensive real estate tax rates for one-homeowners was announced in the December 16 measures at a level of 0.2 to 0.3 percentage points, and the recent measures only raised the tax for multi-homeowners. The affected population is only 0.4% of the total population."

This content was produced with the assistance of AI translation services.