Minimum Land Transaction Permit Area Reduced from 18㎡ to 6㎡... Funding Plan Required for Transactions Over 100 Million Won

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Starting from the 28th, the area threshold requiring approval for buying or selling houses or land in designated land transaction permission zones will be tightened from 18㎡ to 6㎡ for residential areas in Seoul and other metropolitan areas. Additionally, the obligation to submit a funding plan, which previously applied only to housing transactions, will also be introduced for land transactions.

The Ministry of Land, Infrastructure and Transport announced on the 22nd that a partial amendment to the Enforcement Decree and Enforcement Rules of the Act on Reporting and Inspection of Real Estate Transactions, reflecting these changes, was approved at the Cabinet meeting.

According to the amendment, the land transaction approval area thresholds by land use zone will be adjusted as follows: for residential areas, from the current 180㎡ to 60㎡; for commercial areas, from 200㎡ to 150㎡; and for industrial areas, from 660㎡ to 150㎡. The thresholds for green and other areas will remain unchanged at 200㎡ and 60㎡ respectively.

Most local governments in the Seoul metropolitan area, where regulated zones are concentrated, apply a 10% ratio when designating land transaction permission zones. Accordingly, the effective minimum land transaction approval area in these regions will be lowered from 18㎡ to 6㎡ based on urban area standards.

There have been concerns about a "balloon effect" occurring, especially in small apartments, as houses with land shares smaller than the minimum area threshold were excluded from approval requirements.

Alongside this, the submission of funding plans will be mandated for land transactions as well.

Currently, the submission of funding plans is mandatory only for housing transactions above a certain scale. To prevent speculative funds such as disguised gifts or loan misuse from entering through land acquisitions, the scope has been expanded to include land transactions.

Basically, submission is required when acquiring land worth 600 million KRW or more. However, in the metropolitan area, major cities, and Sejong City, if the transaction involves a share of land, a funding plan must be submitted regardless of the amount. Even if it is not a share transaction in these areas, acquiring land worth 100 million KRW or more requires submission of a funding plan.

Furthermore, if within one year of signing the land transaction contract, additional land or adjacent land is acquired and the combined transaction amount is 600 million KRW or more, submission of a funding plan for the land is required.

Kim Hyung-seok, Director of Land Policy at the Ministry of Land, Infrastructure and Transport, stated, "Through this system improvement, we expect to block speculative demand inflows and create a real estate transaction market centered on actual demand." He added, "We will continue monitoring and respond with focused investigations if any abnormal transactions are detected."

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