Even if you decide to buy a home today after viewing it, you can't submit the land transaction permit application in just one day. It will take at least a week to negotiate the price, align the transfer date, draw up the sales agreement, and prepare the land transaction permit application. There are so many documents to submit, and if you hastily file a sloppy land transaction permit application because you're in a rush, you will 100% face a source-of-funds probe later. To sign the final contract by May 9, you need to file the application by the 15th, so the end of last month was effectively the last chance to shop for fire-sale listings.
On the 6th, an employee at a real estate agency in Gangnam District, Seoul, said that transactions of urgent sales by multiple-home owners to avoid the heavier capital gains tax have effectively ended. In fact, dwelling listings have decreased this month, and home prices are again showing signs of rising.
According to real estate big data platform Asil, as of the day, Seoul apartment and officetel listings totaled 75,501, down 2.7% from Mar. 30 (77,585). By district, Gangnam District saw the sharpest drop, with listings plunging 9.4% from 10,989 to 9,965 over the same period.
Home prices are also rising again. According to the weekly apartment price trend released by the Korea Real Estate Board (REB), in the fifth week of March (as of Mar. 30), Seoul's apartment sales price index rose 0.12% from the previous week. Yongsan District and Dongjak District each climbed 0.04%, turning upward, while Seocho District (−0.09%→−0.02%) and Songpa District (−0.07%→−0.01%), excluding Gangnam District, saw narrower declines.
In response, President Lee Jae-myung on the day proposed allowing those who file a land transaction permit application by May 9 to also receive the benefit of the temporary suspension of the heavier capital gains tax. Currently, only those who complete contracts by that date are excluded from the higher tax.
Presiding over a Cabinet meeting at the Blue House, the president said, "Currently, it is known that you must complete the (land transaction) permit and sign the contract by May 9. As a result, many seem to judge that selling is no longer possible after mid-April when considering the permit approval process," adding, "I don't think it needs to go that far."
It typically takes 10 to 15 business days from filing a land transaction permit application to approval. Only after going through this process and receiving the land transaction permit certificate can you sign the main sales contract. For this reason, most districts have been notifying applicants to complete land transaction permit filings around the 15th of this month.
The government's move to ease the criteria for recognizing home sales is intended to extend the deadline for urgent listings by multiple-home owners and thereby increase the supply of dwellings. However, experts said it is uncertain whether actual dwelling transactions will increase.
A real estate expert who requested anonymity said, "Multiple-home owners who have not sold until now intend to hold out," adding, "They will not suddenly put properties on the market just because the deadline has been extended by a few weeks." The expert noted, "In some districts such as Nowon District, land transaction permit applications are piling up, and the measure will likely only help prevent damage caused by administrative delays."
Nam Hyeok-woo at Woori Bank Real Estate Research Institute said, "In Gangnam, urgent listings have been decreasing for two weeks," adding, "Those who absolutely had to sell their dwellings by May 9 finished filing their land transaction permit applications at the end of March." Nam said, "That said, as the recognition deadline for land transaction permits is extended, there will likely be about two weeks of breathing room, which could broaden the base for listings to come to market."