The government postponed the owner-occupancy requirement within the land transaction permit zones under the land transaction permit system to encourage sales by multiple-home owners and nonresident single-home owners, but side effects are growing, including tenants' rights to request contract renewals disappearing overnight. On the ground, some even say that ad hoc policies have turned tenant protections and housing contract practices into a patchwork.
◇ Right to request contract renewal void… tenants in confusion
According to the real estate industry on the 20th, the Ministry of Land, Infrastructure and Transport announced on the 12th that it would expand the deferment of the owner-occupancy requirement under the land transaction permit system to dwellings owned by nonresident single-home owners even when tenants are residing there. This opened the way for nonresident single-home owners in land transaction permit zones to sell homes they have leased on jeonse or monthly rent. Earlier in Feb., the government granted the same benefit only for sales of "rented-out homes" owned by multiple-home owners, and it has now extended it to nonresident single-home owners.
Currently, if you purchase dwellings in a land transaction permit zone, you must move in as an owner-occupant within four months from the date of transaction permission. Because of this, homes with tenants were effectively difficult to trade. To ease this, the government introduced a plan to defer the owner-occupancy requirement for a certain period.
In the Feb. announcement, the government set Feb. 11, 2028, as the deferment deadline for owner-occupancy when multiple-home owners sell rented-out homes. In the May announcement, it set May 11, 2028, as the deferment deadline when nonresident single-home owners sell rented-out homes. The Ministry of Land, Infrastructure and Transport (MOLIT) said, "Owner-occupancy is deferred until the initial expiration date of lease contracts concluded as of May 12, 2026," but added, "At the latest, move-in for owner-occupancy must occur by May 11, 2028."
The problem is that this process has shaken the rights of existing tenants. If a landlord sells dwellings, the new owner must move in by May 11, 2028, making it difficult for current tenants to exercise their right to request contract renewal beyond that point. The Housing Lease Protection Act allows limiting the right to request contract renewal when the lessor or the lessor's family will reside there as an owner-occupant.
Because the government announced a policy to induce nonresident single-home owners to sell and set that buyers must move in by May 11, 2028, tenants who planned to continue renting beyond that time by exercising their right to request contract renewal must vacate. Among tenants, there is discontent that "in the name of curbing home prices, only tenants' rights have been rolled back."
Regarding this, the government's position is that "if a buyer purchases dwellings with a tenant for the purpose of owner-occupancy, the tenant's right to request contract renewal may be refused under the relevant provisions of the Housing Lease Protection Act, but this is unrelated to this owner-occupancy deferment measure."
Kim Dong-soo, secretary-general of the Korea Association of Realtors(KAR), said, "The government designed the deferment plan based on the minimum two-year contract period under the Housing Lease Protection Act, but in the actual market there are various contract types," and added, "Depending on individual contracts, tenant harm and market confusion are inevitable."
◇ Nonresident single-home owners: "It's a problem if we sell, and a problem if we don't"
Nonresident single-home owners are also in a confusing situation. A nonresident single-home owner is someone who rents out their own home to others while living themselves in another area on jeonse or monthly rent. They choose this form for reasons such as children's education or job transfers.
They can sell their existing homes under the impact of the government's reduction of the special long-term holding deduction and the strengthening of holding taxes. The problem comes after that. The government limited eligibility for the "owner-occupancy requirement deferment" available when purchasing dwellings in land transaction permit zones to those who have continuously remained without a home since May 12.
In other words, because nonresident single-home owners were already single-home owners as of May 12, even if they sell their existing homes, they cannot receive a deferment of owner-occupancy if they newly purchase a tenant-occupied home within a land transaction permit zone. In the end, if they buy a new home, they must move in themselves within four months.
Seong Chang-yeop, head of the Korea Association of Rental Housing Providers, said, "The government is urging nonresident single-home owners to sell, but it has blocked the path to buy again," and added, "In the end, it's a problem if you sell, and a problem if you don't."
Experts note that the government keeps issuing regulations and then adding exceptions when side effects appear, undermining market trust. Seo Jin-hyung, a professor in the real estate law and administration department at Kwangwoon University, said, "The land transaction permit system is, in principle, a system premised on owner-occupancy, and recognizing exceptions only for dwellings with tenants can shake the system's equity," adding, "Stopgap policies are fueling market confusion."