If an Apartment under the Building Act, Even 'One-Room' Faces Tax Bomb... Government "Considering Revision"

Assemblyman Kim Gyo-heung of the Democratic Party Proposes Amendment
Urban-Type Housing Over 5 Floors, Including Studios, Classified as 'Apartments'
Cannot Register as Private Rental, Increasing Various Tax Burdens

Vacant property listings at a real estate agency in Songpa-gu, Seoul (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] The government has begun reviewing relief measures for landlords of 'one-room urban lifestyle housing' who face increased tax burdens due to the abolition of the registered rental housing system. This is based on the judgment that if one-room type housing is also prohibited from registering as rental businesses, the number of living spaces for one to two people could significantly decrease. However, some critics argue that the frequent consideration of legal amendments depending on the situation is excessive.

According to the National Assembly and the Ministry of Land, Infrastructure and Transport on the 5th, Kim Gyoheung, a member of the Democratic Party of Korea, recently introduced a partial amendment to the Special Act on Private Rental Housing that excludes one-room type housing from the definition of 'apartment' under the Private Rental Housing Act. Although it is known that the ruling party did not consult with the Ministry of Land, Infrastructure and Transport during the process of proposing the amendment, the ministry has started reviewing it since the bill was submitted.

Earlier, on August 18, the government abolished the short-term rental (4 years) and long-term general apartment purchase rental (8 years) systems according to the amended Private Rental Housing Act. Urban lifestyle housing, even if it is one-room type, is classified as an 'apartment' under the Building Act if it is five stories or higher, and thus was included in the automatic cancellation target for rental business registration.

Since landlords who cannot register as rental businesses lose benefits such as acquisition tax, property tax, and comprehensive real estate tax reductions, criticism has been strong especially from landlords of one-room urban lifestyle housing. There were many concerns that the amendment would reduce the supply of one-room rentals, harming housing stability for low-income residents, and that it could cause fairness issues with similar types of multi-family housing.

A rental business operator in Gyeonggi Province said, "One-room units are intended for vulnerable groups and are not speculative targets," adding, "It is inappropriate to uniformly label them as speculative and cancel rental business benefits just because they fall under apartments according to the Building Act." The ruling party’s proposed amendment also explained, "Concerns about the decrease in one-room rental supply are growing," and emphasized the need to refine the law and respond to the increase in single-person households.

However, it is still uncertain whether private rental registration will be allowed exclusively for one-room urban lifestyle housing. Expanding regulatory exceptions could dilute the purpose of abolishing the registered rental housing system, which aims to stabilize the sales market. It is also burdensome to push for another amendment less than three months after the previous one was passed. A Ministry of Land, Infrastructure and Transport official said, "Since legislative authority lies with the National Assembly, it is difficult to make a definitive statement yet," and added, "We plan to review the proposed amendment."

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