The government deferred the owner-occupancy requirement within the land transaction permit area under the land transaction permit system to induce listings from multiple-home owners and nonresident single-home owners, but the likelihood has grown that tenants' rights to request contract renewal will be rejected because buyers will move in. On the ground, some say that piecemeal policies have turned tenant protections and housing contract practices into a patchwork.
◇ Possibility of limiting the right to request renewal… tenant confusion
According to the real estate industry on the 20th, the Ministry of Land, Infrastructure and Transport said on the 12th that it would expand the application of the owner-occupancy deferral under the land transaction permit system to dwellings owned by nonresident single-home owners that have tenants living in them. It opened the way for nonresident single-home owners in land transaction permit areas to sell homes they have rented out on jeonse or monthly rent. Earlier, in Feb., the government granted the same benefit only for the sale of "rented-out homes" owned by multiple-home owners, and this time extended it to nonresident single-home owners.
Currently, if you purchase dwellings in a land transaction permit area, you must move in within four months from the date of transaction approval. Because of this, homes with tenants were effectively difficult to trade. To ease this, the government rolled out a plan to defer the owner-occupancy requirement for a set period.
In the Feb. announcement, the government set the owner-occupancy deferral period to Feb. 11, 2028, when multiple-home owners sell rented-out homes. In the May announcement, it set the owner-occupancy deferral period to May 11, 2028, when nonresident single-home owners sell rented-out homes. The Ministry of Land, Infrastructure and Transport (MOLIT) noted, "Owner-occupancy is deferred until the end of the initial lease term of lease contracts that are in effect as of May 12, 2026," but added, "At the latest, buyers must move in for the purpose of owner-occupancy by May 11, 2028."
The problem is that this process has shaken existing tenants' rights. 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 after that. The Housing Lease Protection Act allows limiting the right to request renewal if the lessor or the lessor's family will use the dwelling for owner-occupancy.
Because the government announced a policy to induce nonresident single-home owners to sell and set a requirement that buyers move in by May 11, 2028, any current tenant who planned to continue renting past that time by using the right to request renewal will have to vacate. Among tenants, there is discontent that "in the name of curbing home prices, the government only set back tenants' rights."
On this, the government said, "If a buyer purchases dwellings with tenants for the purpose of owner-occupancy, the tenant's right to request renewal may be rejected under the relevant provisions of the Housing Lease Protection Act, but this is unrelated to this owner-occupancy deferral measure."
Kim Dong-soo, secretary-general of the Korea Association of Realtors(KAR), said, "The government designed the deferral 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 say, "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 they themselves live in another area on jeonse or monthly rent. People choose this for reasons such as children's education or job transfers.
They can sell their existing home due to factors such as reduced long-term holding tax deductions and stronger property taxes. The problem comes afterward. The government limited eligibility for "owner-occupancy requirement deferral" when purchasing dwellings in land transaction permit areas to people who have continuously remained without a home since May 12.
In other words, because nonresident single-home owners already owned one home as of May 12, even if they sell their existing home, they cannot receive an owner-occupancy deferral if they newly purchase a tenant-occupied home within a land transaction permit area. In the end, if they buy a new home, they must move in within four months.
Sung Chang-yeop, head of the Korea Residential Landlords Association, said, "The government is urging nonresident single-home owners to sell, yet it has blocked the path to buy again," and added, "In the end, it's a problem if we sell and a problem if we don't."
Experts say the government keeps rolling out regulations and then adding exceptions when side effects appear, eroding market trust. Seo Jin-hyung, a professor in the Department of Real Estate Law at Kwangwoon University, said, "The land transaction permit system is, in principle, a regime premised on an owner-occupancy requirement, and if exceptions are recognized only for dwellings with tenants, the system's equity could be shaken," adding, "Stopgap policies are fueling market confusion."
※ This report was partially revised following mediation by the Press Arbitration Commission.