News regarding land transaction permit zones, a hot topic in the recent , has been announced. Specifically, the exemption of the real residency obligation for homes with tenants in land transaction permit zones will be expanded starting May 29th. This system, which had previously been restrictively applied only to some multiple homeowners, leading to fairness controversies, will now be widely applied to first-time homebuyers looking to purchase ‘tenanted homes’. Attention is focused on what changes this measure will bring to the previously stagnant real estate market.
The Ministry of Land, Infrastructure and Transport has prepared an amendment to the ‘Enforcement Decree of the Act on Reporting Real Estate Transactions, etc.’ considering the protection of actual demanders and market fairness. It will be promulgated and implemented from the 29th after passing through the State Council on the 26th.
What was the problem with the real residency obligation in land transaction permit zones?
The land transaction permit system is a system that requires permission from the head of a local government for land transactions in specific areas to prevent and stabilize land prices. When designated as a permit zone, purchasing a house generally came with the obligation to move in within 4 months after permission and reside there for 2 years.
The problem arose when major metropolitan areas, including all of Seoul and 12 areas in Gyeonggi, were designated as land transaction permit zones by the measure on October 15th last year. A side effect occurred where transactions of ‘tenanted homes’ with remaining lease contract periods were blocked because buyers could not move in immediately. In February, the real residency obligation exemption was allowed for some multiple homeowners, but this fueled controversy over fairness with first-time homebuyers.
Key conditions for the ‘tenanted home’ real residency obligation exemption?
The key details of the expanded real residency obligation exemption measure are as follows:
- Effective Date: May 29, 2026
- Application Deadline: Until December 31, 2026
- Applicable Homes: Homes that are leased or have a jeonse right established as of May 12, 2026
- Buyer Eligibility: Households that have continuously maintained a no-homeowner status since May 12, 2026 (excluding cases where a house was disposed of after the policy announcement to become a no-homeowner)
- Real Residency Exemption Period: Until the initial termination date of the lease contract concluded on May 12, 2026 (at the latest, the obligation to move in and reside for 2 years by May 11, 2028)
- Home Acquisition Period: Completion of ownership transfer registration within 4 months from the date of obtaining land transaction permission
The government explained that this measure simultaneously considered the protection of actual demanders and market fairness under the principle of not allowing speculative gap investment.
What impact will the new exemption measure have on the real estate market?
This expansion of the real residency obligation exemption is expected to provide significant relief to first-time homebuyers who have struggled to purchase ‘tenanted homes’ within land transaction permit zones. In particular, the possibility of properties that were tied up in all of Seoul and major areas of Gyeonggi coming onto the market has increased. From the seller’s perspective, transactions of homes with tenants will be much smoother, potentially leading to an increase in property listings.
However, the government still adheres to the principle of blocking gap investment. The strict restriction of buyer eligibility to no-homeowners and the maximum 2-year exemption period demonstrate this. Ultimately, this measure can be seen as an example of the government’s consistent policy stance to expand opportunities for first-time homebuyers to acquire their own homes while curbing speculative demand.
The expanded real residency obligation exemption in land transaction permit zones, effective from May 29, 2026, will bring meaningful changes to the real estate market. Especially for first-time homebuyers who were considering purchasing ‘tenanted homes’, this could be a golden opportunity. It is important to carefully check the relevant conditions and make wise decisions.