Ruling and Opposition Parties Agree on 3-Year Grace Period for 'Actual Residence Obligation' in Apartments under Price Ceiling System

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The ruling and opposition parties have reached a consensus to postpone the mandatory residence requirement for apartments under the price ceiling system for three years ahead of the general election.

On the morning of the 21st, the National Assembly Land, Infrastructure and Transport Committee held a subcommittee meeting on land bills and agreed on an amendment to the Housing Act reflecting this. The key point is to ease the start of the mandatory residence period from the current 'earliest possible move-in date' to 'within three years after the initial move-in.'

Kim Jeong-jae, chairman of the National Assembly Land, Infrastructure and Transport Committee's bill review subcommittee, said immediately after the meeting, "The current mandatory residence requirement was intended to block and eradicate illegal speculation, but in reality, many actual owners found it difficult to move in immediately for various reasons," adding, "After discussions among lawmakers, it was decided to postpone the mandatory residence requirement for apartments under the price ceiling system for three years."

Since the ruling and opposition parties agreed on this in the Land Committee's bill subcommittee, the related amendment is expected to be submitted and passed at the plenary session on the 29th. If the amendment passes, it will apply to 77 apartment complexes under the price ceiling system, approximately 49,000 households.

Kim Jeong-jae, Chair of the Subcommittee on National Land Legislation of the Land, Infrastructure and Transport Committee, Speaking
(Seoul=Yonhap News) Reporter Lee Jeong-hoon = On February 21, at the Subcommittee on National Land Legislation of the Land, Infrastructure and Transport Committee held at the National Assembly to review the amendment to the Housing Act that postpones the mandatory residence period by three years, Chair Kim Jeong-jae is speaking. 2024.2.21
uwg806@yna.co.kr
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Previously, the mandatory residence requirement for apartments under the price ceiling system was introduced during the Moon Jae-in administration in 2021 to restrict so-called 'gap investment' (purchasing a house with a lease deposit) and to benefit actual demanders. Under current law, those who won general subscription rights for apartments under the price ceiling system in the metropolitan area sold after February 19, 2021, must reside for at least two years from the earliest move-in date. Violators who lease out the property before the legal deadline, pay the balance, or sell the house face up to one year imprisonment or a fine of 10 million won.

With the amendment to the Housing Act postponing the mandatory residence requirement for three years, apartment subscription winners will be able to lease out their apartments and use the lease deposit to pay the balance, providing relief in securing their own homes. Following the government's easing of apartment pre-sale rights restrictions through the revision of the enforcement decree of the January 3 real estate measures last year, this postponement of the mandatory period is expected to revitalize the sluggish real estate market.

However, some express concerns that postponing the mandatory residence requirement could lead to a recurrence of gap investment abuse. Additionally, conflicts may arise between homeowners and tenants with the right to renew lease contracts (2+2 years) when fulfilling the residence obligation after three years. Considering that this amendment is being made ahead of the general election, it is also analyzed that the ruling and opposition parties settled on a compromise agreement.

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