As President Lee Jae-myung noted that a fair tax system for registered private rental dwellings helps stabilize the real estate market, a survey found that registered rental dwellings in Seoul were supplied at rents around half of market rates.
The Korea Housing Lessors Association said on the 2nd that a full review of registered rental dwelling rents reported to the Ministry of Land, Infrastructure and Transport from 2018 to 2024 showed the average jeonse price for registered rental dwellings in Seoul in 2024 was 257.41 million won, or 53.1% of the average jeonse price for Seoul dwellings based on KB Kookmin Bank market data that year (485.08 million won).
In 2018, the average jeonse price for registered rental dwellings in Seoul was 62.7% of general dwelling market prices. Over the next six years, it fell by about 10 percentage points (p).
While general monthly rent and jeonse rents have continued to rise, rents for registered rental dwellings fell as they were institutionally capped.
Under the registered private rental business system, landlords receive tax benefits if they fulfill obligations such as an annual rent increase cap of 5% and compliance with mandatory rental periods.
By dwelling type, the average jeonse for registered rental apartments in Seoul in 2024 was 411.32 million won, equal to 65.1% of the general apartment market jeonse (631.76 million won). It fell more than 12 percentage points over six years from 77.7% in 2018.
General apartment jeonse in Seoul rose 36.6% from 462.77 million won in 2018 to 631.76 million won in 2024. By contrast, registered rental apartment jeonse rose only 14.4%, from 359.71 million won to 411.32 million won.
Registered rental for apartments was abolished in 2020, and all remaining registered rental apartment dwellings will be automatically canceled over three years starting this year.
In 2024, the average jeonse for detached and multi-household dwellings supplied as registered rentals was 143.14 million won. That is 28.5% of the average jeonse of 503.14 million won for general detached and multi-household dwellings.
Sung Chang-yeop, head of the Korea Housing Lessors Association, said, "Registered rental dwellings are contributing to housing stability for ordinary people by offering rents far below market rates," and added, "Because registered rental dwelling operators have fulfilled as many as 21 obligations, including rent increase limits and compliance with mandatory rental periods, performing a public function comparable to public rentals, unreasonable regulations on registered rental dwellings will lead to instability in the lease market."
Earlier, the president questioned making permanent the benefit that excludes registered rental operators from heavier capital gains taxes on multiple dwellings. Through social media (SNS) last month, the president noted, "Wouldn't it be fair for various tax rules on registered rental dwellings after the end of the rental period to be the same as for general rental dwellings?"
The president added, "If registered multi-home holdings that have passed the mandatory rental period and the specified period for exclusion from heavier capital gains taxes come onto the market like general multi-home holdings, it will have the effect of supplying hundreds of thousands of households."