The South Korean government is set to allow exemptions from the residency requirement for up to two years for buyers of multi-household properties with tenants, ahead of the end of a tax deferment on properties.
In the lead-up to the termination of a tax deferment for multi-household owners in South Korea scheduled on May 9, the government has announced a new exception that allows buyers of these properties to postpone residency requirements for up to two years if the property is occupied by a tenant. Deputy Prime Minister Koo Yoon-cheol explained this decision during a cabinet meeting, urging rapid contract finalization before the deadline and clarifying that this is truly the last chance to avoid additional taxation on property sales. President Yoon Suk-yeol supported this by asserting that there should be no ambiguity in the measures being undertaken.
The government is also implementing a grace period for property transactions done by May 9, granting additional time for specific districts such as Gangnam and Yongsan. These areas face a tight deadline, and the government has introduced a uniform allowance of four months for property payment and registration for transactions within designated land transaction regions. Meanwhile, new land transaction permission zones will have a six-month extension to accommodate the ongoing real estate adjustments taking place within the capital and adjacent areas.
This decision appears to be a response to market concerns regarding the stagnation in transactions for properties with existing tenants, which has been a source of frustration amongst potential buyers. Koo plans to unveil further details on the policy later in the week, signifying swift governmental action to facilitate the housing sector. In an exchange during the meeting, President Yoon emphasized the necessity of providing clear directives concerning taxation relief for registered rental businesses, further delineating between general landlords and registered rental property owners.
