'Jeonse Deposit Priority Payment' Bill Passes the Public Administration Committee... Reducing Fraud Damage

Expected to be approved at the plenary session on the 27th
Chairman Jang Je-won: "Hope it helps even a little"

The "Partial Amendment to the Local Tax Basic Act," which includes provisions to prioritize the repayment of jeonse deposits over taxes even if a jeonse house goes to auction or public sale, passed the National Assembly standing committee plenary session on the 25th. Since both ruling and opposition parties agree on minimizing damages from jeonse fraud, it is expected to be approved at the plenary session on the 27th.

The National Assembly's Public Administration and Security Committee held a plenary session that morning, submitted the amendment to the Local Tax Basic Act, and immediately approved it.

Jang Je-won, Chairman of the National Assembly's Public Administration and Security Committee. Photo by Hyunmin Kim kimhyun81@

The amendment mainly stipulates that even if the house where the tenant resided goes to auction or public sale, the tenant's jeonse deposit must be repaid before the local taxes imposed on the property. It was prepared with the intention of protecting victims of jeonse fraud by prioritizing the repayment of tenant deposits over delinquent local taxes for lease contracts with a confirmed date.

Under the current law, when a jeonse house goes to auction or public sale, national and local taxes imposed on the real estate are repaid before the tenant's deposit regardless of the legal deadline. As a result, tenants can only recover their jeonse deposit from the remaining amount after taxes are deducted. Yoo Sang-jo, senior expert of the Public Administration and Security Committee, explained at the meeting, "If the lease deposit is repaid first as in the amendment, it is expected to help victims suffering from jeonse fraud."

Earlier, the policy chiefs of the three parties?the People Power Party, the Democratic Party of Korea, and the Justice Party?held a meeting on the 21st and reached a consensus to prioritize the passage of this law to support victims of jeonse fraud. Considering the urgency of the amendment, the Public Administration and Security Committee processed the bill submission, referral to the subcommittee, subcommittee and plenary session approvals all within one day.

Since the amendment was agreed upon by both ruling and opposition parties, it is expected to be approved at the National Assembly plenary session scheduled for the 27th. Jang Je-won, chairman of the Public Administration and Security Committee and a member of the People Power Party, said in his closing remarks at the plenary session, "Unforgivable jeonse fraud cases are incidents where hopeful dreams of owning a home turned into tears of blood," adding, "Although it is far from enough to fully restore the damage, I hope this will help even a little." He continued, "The passage of the bill today confirmed that there is no distinction between ruling and opposition parties when it comes to people’s livelihoods," and added, "When I chaired the first meeting, I told the members that I hoped the committee would be a source of strength for the tired and weary people, and I hope the Public Administration and Security Committee will make people feel that it helps them through swift bill processing."

Meanwhile, the People Power Party and the government are also considering a plan to fully exempt acquisition tax when victims of jeonse fraud purchase the house they currently reside in. The People Power Party plans to propose a special law on jeonse fraud within this week and aims to process it during the May extraordinary session of the National Assembly. The special law is likely to include measures to reduce acquisition tax by 50-100% or to provide property tax reductions for a certain period. On the 23rd, the ruling party and government announced the enactment of a special law to support victims of jeonse fraud, stating that tax reductions and long-term low-interest loans would be provided when tenants purchase the auctioned house.

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