After National Tax Service Commissioner Lim Gwang-hyun recently said the benefit that excludes registered rental apartments from additional capital gains tax should be changed to push them onto the market as listings, a landlords' group voiced concern. The group argued that changing the system after the fact to disadvantage landlords is a policy that fundamentally undermines policy credibility. It also noted that such a policy would instead harm tenants' housing stability.
In materials distributed on the 25th, the Korea Association of Landlords said, "Tax preferences such as the exclusion from additional capital gains tax are not simple favors but a just reward for faithfully fulfilling as many as 21 obligations for housing stability, including compliance with mandatory rental periods, limits on rent increases, reporting of lease contracts, and joining deposit guarantees." It added, "If the government repeatedly changes the system promised at the time of registration after the fact and retroactively imposes disadvantages, what citizen could trust national policy?" and criticized "retroactive regulation is an act that fundamentally undermines policy credibility."
Earlier, on the 21st, Commissioner Lim wrote on his X (formerly Twitter) account that multi-homeowners who own registered rental dwellings are excluded from additional capital gains tax even after the rental period ends, worsening the phenomenon of listings being locked up. He also offered the view that if these owners are given a chance to sell, about 68,000 Seoul apartments could come onto the market.
In February, President Lee Jae-myung also said, "Wouldn't it be fair for various tax rules on registered rental dwellings after the rental period ends to be the same as for general rental dwellings?" making a remark in the same vein.
The landlords' association argued, "Forcing registered rental dwellings, supplied at rent levels around half of market prices, out of the market is no different from eliminating tens of thousands of public rental dwellings," and said, "If the government pushes policies that reduce the supply of affordable rental dwellings, it will ultimately result in harming tenants' housing stability."
Registered rental dwellings of the apartment type whose registrations are currently maintained have been closed to new registrations since the July 10, 2020 real estate measures. The system was also changed so that existing registered dwellings are automatically deregistered when the mandatory rental period ends.
Tenants of registered rental dwellings can extend their contracts during the mandatory rental period even without exercising the right to request renewal under the Housing Lease Protection Act. Even if the registration of the rental dwelling is canceled, they can still exercise the right to request renewal thereafter and live for an additional two years.
Seong Chang-yeop, head of the landlords' association, emphasized, "While supplying new dwellings takes years, registered rental dwellings are an already existing base of rental supply," and said, "The government should pursue policies that, along with expanding new supply, also stably maintain the existing supply of rental dwellings."