President Lee Jae-myung said, in connection with the deadline for excluding the heavy capital gains tax on multi-homeowners, "Let's keep the May 9 deadline, but also allow cases where a land transaction permit application was filed by May 9," prompting the Ministry of Economy and Finance and the Ministry of Land, Infrastructure and Transport to begin reviewing related Enforcement Decree revisions on the 7th.
According to the Enforcement Decree of the Income Tax Act revised in February, for dwellings subject to a land transaction permit, a permit must be obtained by May 9 and a sales contract must be signed by the same day with receipt of the deposit confirmed to qualify for exclusion from the heavier tax. Because a land transaction permit disposition can generally take up to 15 days after application, under the current rules, a seller would effectively have to complete the transaction by around mid-Apr., which has raised concerns.
As the president noted, for the proposal that "we keep the May 9 deadline, but allow cases where an application was filed by May 9" to be realized, at least two Enforcement Decrees must be revised together.
First, the transitional provisions in the Enforcement Decree of the Income Tax Act must be amended. The current rule requires "signing a sales contract and receiving the deposit by May 9, 2026" for dwellings subject to a land transaction permit. Because executing a sales contract for dwellings subject to a land transaction permit effectively presupposes the permit, cases where only an application is filed and the disposition is issued afterward are not救済ed. For example, if the wording "sign a sales contract" is adjusted to something like "file a land transaction permit application by May 9, 2026, and then, after obtaining the permit, sign the sales contract," it could become feasible.
In addition, the Enforcement Decree of the Real Estate Transaction Reporting Act, which provides for a grace on the owner-occupancy requirement within land transaction permit zones for dwellings with tenants, must be revised together. The special case allows the owner-occupancy obligation to be eased for up to two years when disposing of a tenant-occupied dwelling to a household without a home in areas where a land transaction permit zone and a designated adjustment area overlap. The condition for such a disposition is limited to "cases where a permit was obtained before May 9, 2026," which needs to be adjusted to "cases where a permit application was filed before May 9, 2026, and the permit was obtained thereafter," and the like.
There are projections that it could take about two weeks at the earliest to revise the Enforcement Decrees. While the standard procedure takes months, the process can be shortened in urgent cases. In fact, the Enforcement Decree amendment to the Real Estate Transaction Reporting Act that included the special case easing the owner-occupancy requirement for dwellings with tenants was preannounced on Feb. 13 and was promulgated and enforced on the 27th, 14 days later.