From 'Dong' to 'Pilji' in Land Transaction Permission Zones... Amendment Bill for Real Estate Transaction Reporting Act Proposed

Representative Yoo Kyung-jun of the People Power Party Proposes
"Expecting Resolution of the Dark Zone Permit Designation Issue"

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Hyun-ji] A bill proposing to change the designation of land transaction permission zones from the 'dong' unit to the smallest unit, the 'parcel,' is set to be introduced. The aim is to reduce the possibility of property rights infringement by subdividing the scope of the permission zones.

According to political circles on the 28th, Yoo Kyung-joon, a member of the People Power Party, will soon introduce a representative amendment to the Real Estate Transaction Reporting Act that sets the standard unit for designating land transaction permission zones as parcels. The land transaction permission system requires approval from the relevant city, county, or district office when trading houses or land, introduced to prevent speculative demand inflow in advance. Currently, in Seoul, major reconstruction complexes such as Gangnam and Seongdong, as well as public redevelopment candidate sites, are designated as permission zones.

The current law does not explicitly specify the criteria for designating permission zones. However, according to internal guidelines of the Ministry of Land, Infrastructure and Transport, zones are designated at the legal dong level. It has been pointed out that this causes unnecessary regulations by including areas without speculative transaction concerns in the permission zones. Yoo believes that narrowing the standard to parcels (the smallest legal unit of land) can minimize property rights infringement.

In Gangnam, Yoo's constituency, the Jamsil MICE (Meetings, Incentives, Conventions, and Exhibitions) complex project scheduled for 2023 includes part of Daechi-dong. Since the entire dong was designated as a permission zone, there has been significant opposition from local residents. According to the amendment, only 34% (1.2㎢) of Daechi-dong could be designated. Yoo stated, "The land transaction permission system is a strong measure where the government directly regulates transactions, so the designation of permission zones should be decided carefully," adding, "I expect this amendment to be a good means to resolve problems caused by opaque permission zone designations."

If the law passes, the area of permission zones will decrease, which is expected to significantly impact land transaction volumes. According to the Ministry of Land, Infrastructure and Transport's real transaction price disclosure system, the number of apartment sales transactions in Jamsil-dong, Seoul, dropped from 1,366 cases in the year before the system's implementation (June 23, 2019?June 22, 2020) to 363 cases one year later.

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