Households with Annual Income Over 100 Million Won Will Also Be Eligible to Apply for Special Public Housing Supply

Government Announces Legislative Notice for Amendment to 'Public Housing Special Act Enforcement Rules'

Income Criteria for Special Supply Eased for Public Sale Following Private Sale
Priority Supply and General Supply Differentiated... Up to 30%p Increase by Type
Dual-Income Families of Four Can Apply for Newlywed Special Supply with Annual Income up to 104.6 Million KRW

Income Criteria Relaxed by up to 20%p for 1-2 Person Households in Public Rental Housing
Resolution of 'Minimum Wage > Income Criteria' Reversal Issue

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the "8th Real Estate Market Inspection Meeting of Related Ministers" held on the 14th of last month at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Lee Chun-hee] The Ministry of Land, Infrastructure and Transport announced on the 12th that it will issue a legislative notice from the 13th on the amendment of the 'Public Housing Special Act Enforcement Rules,' which includes easing the income requirements for special supply to expand housing supply opportunities for non-homeowners with actual demand and improving income criteria for public rental housing to strengthen housing support for 1-2 person households.

This amendment is a follow-up measure to the housing special supply system improvement plan announced at the '8th Real Estate Market Inspection Meeting of Related Ministers' held on the 14th of last month and regulatory improvement tasks identified by the Ministry of Land, Infrastructure and Transport's Regulatory Innovation Committee.

Significant Relaxation of Special Supply Criteria for Public Sale Following Private Sale

Public Sale Special Supply Income Requirement Relaxation Plan (Provided by the Ministry of Land, Infrastructure and Transport)

The amendment includes measures to significantly ease the income requirements for special supply in public sales following private sales. Currently, the Ministry of Land, Infrastructure and Transport is issuing a legislative notice from the 5th on the 'Partial Amendment of the Housing Supply Regulations,' which eases income requirements for newlyweds and first-time homebuyers in private housing special supply. Both special supplies are divided into 70% priority supply and 30% general supply, with a significant relaxation of income requirements for the general supply.

For the private housing newlywed special supply, the priority supply applies an income requirement of 100% of the previous year's average monthly urban worker income (120% for dual-income households), and the general supply applies 140% (160% for dual-income households). For the first-time homebuyer special supply, the income criteria are 130% for priority supply and 160% for general supply, with no separate relaxation for dual-income households.

In the case of public sales, the supply is also divided into 70% priority supply and 30% general supply, but the income requirements remain slightly lower than those for private housing. This appears to reflect the existing income requirement gap between private and public housing.

Current Income Criteria for Public Sale Housing (Provided by Korea Land & Housing Corporation)

Specifically, the current income criteria for newlywed special supply are 100% of the previous year's average monthly urban worker income (120% for dual-income households), and 100% for the first-time homebuyer special supply. The newlywed hope town, part of the newlywed support measures, applies a 120% (130% for dual-income households) standard, and for first-time homebuyers purchasing homes priced over 600 million KRW, the criteria are relaxed by 10 percentage points each.

With the enforcement of the amendment, income criteria will be raised by up to 30 percentage points for each supply category. For the newlywed special supply, priority supply will apply 100% of the previous year's average monthly urban worker income (120% for dual-income households), and general supply will apply 130% (140% for dual-income households). The newlywed hope town will apply the same criteria as the general supply. For the first-time homebuyer special supply, 100% applies to priority supply and 130% to general supply, with no additional relaxation for dual-income households.

If applicants fail to be selected in the priority supply for both special supplies, they will automatically be entered into the general supply lottery.

Accordingly, under the previous criteria, only newlywed households with a monthly income of 7.47 million KRW or less (140% for a four-person dual-income household) and first-time homebuyers with 6.22 million KRW or less (130%) could apply. Going forward, the income criteria will increase to a maximum of 8.71 million KRW for newlyweds and 8.09 million KRW for first-time homebuyers. In annual salary terms, this corresponds to approximately 104.6 million KRW and 97.08 million KRW, respectively.

Public Rental Housing Income Criteria Lower Than Minimum Wage?… Improved by Relaxing 1-2 Person Household Standards

Improvement Plan for Average Monthly Income Standards of 1- and 2-Person Households (Provided by the Ministry of Land, Infrastructure and Transport)

Along with raising income criteria for sale housing, income criteria for public rental housing will also be improved. Last year, the government adjusted the public rental housing entry criteria, which had applied the previous year's average monthly urban worker income standard for three-person households to 1-2 person households, to apply income criteria based on household size for 1-2 person households as well. This was to prevent a reversal phenomenon where a single-person household earning 5.4 million KRW monthly could qualify for rental housing, while a three-person household with about 1.85 million KRW per person monthly income could not.

However, as the income criteria for 1-2 person households were significantly lowered, a side effect emerged where it became excessively difficult for 1-2 person households to qualify for public rental housing. For example, based on last year's average monthly urban worker income of 2.64 million KRW for a single-person household, the income criterion for the second priority applicants of permanent rental housing, which applies 50% of the previous year's average monthly urban worker income, became 1.32 million KRW monthly, which is even lower than the minimum wage of 1.79 million KRW per month.

To correct this side effect, the income criteria will be raised by 20 percentage points for single-person households and 10 percentage points for two-person households. Accordingly, when the amendment is applied, rental housing with a 50% income criterion will apply 70% (1.85 million KRW) for single-person households and 60% (2.63 million KRW) for two-person households, resolving the reversal issue with the minimum wage.

Legal Basis Established for Pre-Subscription… Children Born Before Marriage Registration Included in Special Supply Criteria

The area around Gyosan District in Hanam City, Gyeonggi Province, where 1,100 households will enter the preliminary subscription in November-December next year, and 2,500 households in 2022.
[Image source=Yonhap News]

The government is also establishing a legal basis for the pre-subscription system planned to be implemented next year. To provide a stable housing supply foundation for actual demanders, the government plans to introduce the pre-subscription system targeting the 3rd New Towns and others. The amendment includes provisions allowing the Minister of Land, Infrastructure and Transport to recruit not only prospective residents (waiting list) but also reservation holders as necessary. However, detailed matters regarding recruitment and selection of reservation holders will be separately established in guidelines.

Additionally, the scope of elderly welfare housing will be expanded beyond permanent rental housing to include constructed public rental housing such as national rental and happy housing, broadening the benefits of elderly-tailored services. Priority selection criteria will be established for long-term care grade holders to support elderly residents in continuing to live in their communities.

Unlike the current requirement to announce resident recruitment for at least 10 days, there are no separate regulations for correction announcements. The amendment requires that if important matters affecting resident selection change, a correction announcement must be made for at least 5 days. Also, newlyweds with children born before marriage registration, who were previously excluded from priority and special supply first priority under civil law provisions, will now be recognized with the same qualifications as newlyweds who gave birth during marriage.

The legislative notice period for this amendment to the Public Housing Special Act Enforcement Rules is 40 days from the 13th to the 23rd of next month. After consultations with related agencies and review by the Ministry of Government Legislation, it is planned to be enforced in January next year. The full text of the amendment can be found on the Integrated Legislative Notice Center and the Ministry of Land, Infrastructure and Transport website. Opinions can be submitted via the Integrated Legislative Notice Center, mail, or fax.

A Ministry of Land, Infrastructure and Transport official said, "This amendment is expected to provide more chances for subscription wins to non-homeowner actual demand groups such as dual-income newlyweds and prevent low-income 1-2 person households from being excluded from housing support." He added, "We will continue to improve public housing supply systems for the housing stability of ordinary citizens and pursue quality improvements to enhance residents' living standards."

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