Ministry of Land, Infrastructure and Transport's First Work Report to Transition Committee... Focus on Real Estate Regulation Easing

President-elect Yoon Suk-yeol is giving a greeting after the appointment ceremony of the Special Committee on Regional Balanced Development held at the Transition Committee in Tongui-dong, Jongno, Seoul on the 24th.

The real estate reform plan and outline of President-elect Yoon Seok-yeol, who has announced a major reform of the real estate market, are expected to be revealed.

According to the Presidential Transition Committee (Transition Committee) and the Ministry of Land, Infrastructure and Transport (MOLIT) on the 25th, MOLIT will hold its first business briefing at the Transition Committee office in Tongui-dong in the afternoon. It is expected that a report on the implementation plan and realization measures for the real estate pledges under MOLIT’s jurisdiction, as well as current real estate market trends, will be delivered through Ha Dong-soo, Director General of Planning and Coordination at MOLIT.

President-elect Yoon’s real estate pledges include those requiring legal amendments and those that can be promoted through government policy intentions without legal changes. Since the Transition Committee has stated that it will "first review pledges that can be implemented immediately without legal amendments," measures that can be implemented immediately through government enforcement ordinances, enforcement rules, and notifications are expected to be prioritized.

According to this approach, it is expected that deregulation of reconstruction safety inspections, adjustment of the official property price realization rate, and measures to resolve instability in the lease market will be included. President-elect Yoon has pledged to ease regulations on reconstruction, redevelopment, and remodeling to increase housing supply in urban areas. Although the possibility of completely exempting safety inspections was mentioned, concerns about causing housing price instability have led to a consensus to ease regulations only to a certain extent. An incentive to raise the floor area ratio, which determines the profitability of reconstruction projects, from the current 300% to 500% is also a matter for revision in MOLIT enforcement ordinances.

The roadmap for the realization of official property prices is also likely to come under scrutiny. The official property prices announced on the 23rd rose by 17.22% compared to last year, marking two consecutive years of double-digit increases. Although measures to ease the tax burden on single-homeowners were simultaneously announced, these are temporary. There have been cases where the tax burden has sharply increased even for single-homeowners. As the realization rate surged during the housing price rise, increasing taxpayers’ burdens, the Transition Committee holds the view that "speed adjustment" of the roadmap is necessary. MOLIT has also acknowledged that the roadmap is somewhat rigid and has announced plans for supplementation. It is expected that the target level of the roadmap (90% of market price) and the achievement period (2030) will be reconsidered.

Measures to resolve instability in the lease market in the second half of the year are also expected to be included in the business briefing. Due to the introduction of the right to request contract renewal, the volume of leases with rent capped at within 5% is expected to flood the market from July. Proposals such as expanding tax incentives for landlords who increase rent within 5% and allowing new registrations of registered lease businesses may be presented.

Although key real estate pledges of President-elect Yoon such as the reconstruction excess profit recovery system, the price ceiling system for sale prices, and the abolition of the three lease laws are included, these require the consent of the Democratic Party, which holds a majority in the National Assembly, and are therefore expected to be treated as mid- to long-term tasks. Based on the contents reported on this day, the Transition Committee is expected to formulate a comprehensive real estate policy for the new government through the newly established Real Estate Task Force (TF).

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