[Ryu Taemin's Real Estate A to Z] 'Live Office' Like Officetels Gaining Popularity... Is It Okay to Live There?

Exempt from Various Housing Regulations Such as Taxes, Subscription, and Resale Restrictions
Classified as Non-Residential Facilities, Residence Is Clearly Illegal
Many Illegal Interior Modifications Raise Concerns Over Crackdowns
Beware of Risk That Benefits May Disappear If Housing Regulations Are Eased

[Asia Economy Reporter Ryu Taemin] A product called the so-called ‘live office,’ which allows section offices within knowledge industry facilities to be used like residential officetels, is gaining popularity. Classified as non-residential facilities, they are relatively free from various regulations such as loans and taxes, and there is high demand from small-scale companies that find it difficult to secure separate dormitories, resulting in high competition rates in the sales market. However, since actual residence is legally prohibited and profitability may decline if regulations on alternative means such as apartments and officetels are lifted, caution is advised when investing.

According to the industry, in the subscription for Godeok I-Park Dearban in Gangdong-gu, Seoul, held last August, a total of 18,576 people applied for 590 office units, recording an average competition rate of 51 to 1. In particular, the largest 4th group (204~296㎡ exclusive area) saw a competition rate of 410.5 to 1.

Earlier in July, Songdo Centum Hive, which included 1,620 live office units, also succeeded with an average competition rate of 26.3 to 1. The Hillstate Dongtan Station Multiplier live office, with 678 units sold in the same month, was completely sold out within four weeks.

Live offices are classified as office facilities under the Building Act. Since they are not residential, they are not included in the comprehensive real estate tax for housing and are exempt from capital gains tax surcharges. There are no separate subscription regulations or resale restrictions. Despite being offices, they are equipped with shower booths, sinks, and restrooms, and balconies can also be installed, making them popular as niche products.

Generally, since they are located within industrial complexes where land prices are low, the sale prices are relatively affordable. This attracts interest from small businesses that find it difficult to have separate dormitories. Loans of up to 80% are possible, and live offices located in knowledge industry centers also benefit from acquisition tax and property tax reductions.

However, it should be noted that using them as residential spaces is strictly illegal under the law. Purchased offices can only be used as office facilities or for leasing, and moving-in registration is not allowed. Especially, live offices located within knowledge industry centers cannot be purchased by ordinary individuals, and it is common for sales representatives to advise setting up a business in an eligible industry for occupancy and later switching to rental business. It is also important to note that if illegally remodeled for residential use, such as installing an attic, a compliance penalty will be imposed on the owner rather than the building owner.

Seo Jin-hyung, president of the Korea Real Estate Society (professor at Gyeongin Women’s University), said, "As regulations focus on the housing market, various loophole products are indiscriminately emerging to avoid them," adding, "In outlying areas, if regulations on apartments and officetels are eased, it may become difficult to find tenants and sell properties, so caution is necessary."

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