Land Lease Sale Housing to Allow Transactions Between Individuals

Sangwoo Park, Minister of Land, Infrastructure and Transport

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The Ministry of Land, Infrastructure and Transport announced on the 5th that, according to the amendment to the Housing Act effective June 27, leasehold land sale housing will also be allowed for private transactions between individuals.

Until now, buyers of leasehold land sale housing were unable to trade privately, and could only request public repurchase at the purchase cost (down payment + interest calculated using the average interest rate of a 1-year bank time deposit). With this amendment, buyers of leasehold land sale housing will be able to freely trade after fulfilling the 5-year mandatory residence period and the 10-year resale restriction period.

If a public repurchase is requested during the resale restriction period, the repurchase will be made at the purchase cost before the mandatory residence period expires, and during the period after the mandatory residence period but within the resale restriction period, repurchase will be made at the amount of the down payment plus 70% of the market price gain. Here, the market price gain is defined as the appraised value, assessed according to the "Act on Appraisal and Appraisers," minus the down payment.

The Korea Land and Housing Corporation resupplies publicly repurchased houses to non-homeowners at a minimum price that includes the acquisition cost and registration fees. Those who receive the resupplied houses must fulfill the remaining mandatory residence and resale restriction periods.

Although consent from the Korea Land and Housing Corporation is required to resell a house under resale restriction due to exceptional reasons, the lack of specific procedures caused inconvenience. This has been improved by newly requiring submission of a resale consent application form, to which a response regarding consent will be given within 14 days.

When reporting member recruitment for regional housing cooperatives or applying for housing construction project approval, submission of "proof of land use rights acquisition" and "land use consent letter" is required; however, since no specific form was prescribed, disagreements often arose among stakeholders regarding the validity of self-made contracts. Therefore, a "land use consent form" has been newly introduced for use.

Han Seong-su, Director of Housing Policy at the Ministry of Land, Infrastructure and Transport, stated, "Through this amendment, leasehold land sale housing can be freely traded after 10 years of ownership," and added, "We expect that the supply of leasehold land sale housing will be revitalized in public housing sites and other areas."

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