S. Korea extends owner-occupancy waiver in land-transaction zones by one year

The deadline to apply for an owner-occupancy deferral when purchasing a tenant-occupied home in a land-transaction permit zone will be extended to the end of next year. The expanded measure will also cover lease renewals exercised under a tenant's right to request contract renewal, not just the remaining term of an existing lease.

The Ministry of Land, Infrastructure and Transport said Thursday it would extend the application deadline for the owner-occupancy deferral measure — first announced in May — by one year, from Dec. 31, 2026, to Dec. 31, 2027.

The government had allowed homeownership-free end-users purchasing a tenant-occupied home in a land-transaction permit zone from May 12 this year to defer moving in until the existing lease expired, rather than requiring immediate occupancy. To prevent speculative purchases, the measure imposed a strict no-homeownership requirement on buyers and required two years of actual residence after the lease ends.

The one-year extension reflects the impact of the Aug. 3 tax reform package, through which the government in effect signaled to multi-home owners and holders of high-value properties to sell by 2027. The reform includes a significant tightening of residency requirements for the long-term holding special deduction for single-homeowner households starting in 2028, a new cap on the deduction, and a temporary easing of the capital gains tax surcharge on multi-home owners for 2027 and 2028. The extension responds to criticism that the government's push to bring multi-home and high-value listings to market by next year was undercut by the year-end deferral deadline, which made it difficult to trade homes still under lease.

At the ruling party's floor leadership meeting on Tuesday, party leaders also strongly urged the government to ease transaction restrictions on tenant-occupied homes in land-transaction permit zones to strengthen the effectiveness of the tax reform.

An amendment to the enforcement decree of the Real Estate Transaction Reporting Act incorporating the supplementary measures will be open for public comment starting Friday before taking effect Oct. 1. The changes will apply to all homes that are under lease or subject to a jeonse right as of the effective date. The existing condition requiring buyers to complete acquisition — registration — within four months of receiving a permit remains unchanged. Where the timing of tax benefits is pushed back — such as when a mandatory rental period remains on a registered rental apartment in a regulated zone, or when the transfer of cooperative membership is restricted due to reconstruction or redevelopment in a speculation-overheated zone — buyers may apply for a 15-month deferral starting from the relevant date, such as the end of the mandatory rental period or the date of a relocation notice.

Beyond extending the application deadline, the amended enforcement decree significantly broadens the scope of eligible deferrals. Previously, move-in could be deferred only through the end of the current tenant's remaining lease term. Going forward, buyers will be able to defer for one additional renewal period of up to two years. Combined with the 15-month application window from the Oct. 1 effective date and the 24-month renewal period, buyers can delay move-in by up to three years and three months, meaning they must complete their move-in by 2029 at the latest.

Including lease renewals in the deferral scope is intended to ease pressure on tenants to vacate due to owner-occupancy obligations and to address supply-demand imbalances and housing instability in the jeonse and monthly rent market.

However, the end-user eligibility requirements and the residency obligation remain strictly in place to block speculative demand. Buyers must have no existing home ownership and must live in the property for two years after moving in.

Kim I-tak, first vice minister of land, infrastructure and transport, said the measures were designed to "uphold the owner-occupancy principle of the land-transaction permit system while addressing the practical difficulties in trading tenant-occupied homes and improving housing stability for tenants." He added that the ministry would "ensure transactions remain driven by genuine end-users by maintaining the no-homeownership requirement and the two-year residency obligation, and thoroughly block speculative demand."