Minimum Area for Land Transaction Permission Zones Reduced... Closing Loopholes to Prevent Speculative Trading

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[Asia Economy Reporter Moon Jiwon] The 'minimum area standard' requiring approval for transactions in designated land transaction permission zones will be significantly tightened to one-third of the current level. This measure aims to prevent overheating of housing prices by blocking speculative loopholes involving small-scale shares.

On the 9th, the Ministry of Land, Infrastructure and Transport announced the legislative notice of the 'Enforcement Decree Amendment of the Real Estate Transaction Report Act,' which includes these details. Land transaction permission zones are regulated areas where land and housing can only be traded for actual use purposes due to concerns over rampant speculative transactions. Contracts made without approval are subject to imprisonment of up to two years or fines up to 30% of the land price.

According to the amendment, the minimum land transaction permission area by land use zone will be reduced as follows: residential areas from 180㎡ to 60㎡, commercial areas from 200㎡ to 150㎡, and industrial areas from 660㎡ to 150㎡. Green areas will change from 100㎡ to 200㎡, and other areas from 90㎡ to 60㎡. The Minister of Land, Infrastructure and Transport or the heads of metropolitan cities and provinces can set the approval target area within a range of 10% to 300% of the standard area. Accordingly, the minimum area requiring land transaction approval will be reduced to 6㎡ for residential areas, 15㎡ for commercial and industrial areas, and 6㎡ for other areas.

The government decided to adjust the minimum area criteria for land transaction permission to suppress speculative transactions and enhance the effectiveness of the land transaction permission system. In fact, last year, Seoul designated Jamsil-dong in Songpa-gu and Samseong-dong, Cheongdam-dong, and Daechi-dong in Gangnam-gu as land transaction permission zones due to localized housing price increases. However, small-scale shares were excluded from regulation, leading to criticism of loopholes.

In April, Seoul also designated 24 reconstruction complexes in Apgujeong, as well as Yeouido, Mok-dong, and Seongsu Strategic Maintenance Zones as land transaction permission zones. There is also a possibility that areas like Nowon-gu, where apartment prices have recently surged and which are currently excluded from these zones, may be added later. With the strengthened criteria and expanded land transaction permission zones, the housing price rise is expected to slow down.

The amendment also includes a follow-up measure from the March 'Real Estate Speculation Eradication and Recurrence Prevention Plan,' mandating the submission of a funding plan when acquiring land above a certain transaction amount. In the Seoul metropolitan area, major cities, and Sejong City, reporting is required regardless of transaction price, while in other regions, purchasers of pure land worth 600 million KRW or more must report their land acquisition funding and usage plans to the city, county, or district office.

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