Six-Month Restriction on Reselling Farmland within Permitted Areas for Land Transactions

As of late this month, farmland specified as being permitted areas for dealing in real estate cannot be resold for six months after its purchase. To prevent dealing without permission, such as disguised donations of land of permitted areas for dealing, a plan to include land gifts as permitted will be carried out.

A total of 44 regions throughout the nation, including Bundang-Gu in Seongnam City of Kyeongki province and Asan City in South Chungcheong, where land prices have risen sharply, currently conform to designated requisites for land speculation in which a transfer income tax is imposed based on real market prices. Among these areas, Kyeongki-Do and Chungcheong-Do have a strong possibility to be designated as speculation areas this month.

On February 4, the government held what it called a “Meeting for Stable Alternatives of Real Estate Markets” supervised by Choi Jae-Duk, the Vice-Minister of Construction and Transportation, in the Gwacheon Government Complex and announced a countermeasure for stable land prices.

According to the counterplan, the government will revise a provision for handling land transactions later this month and ban resale in cases of farmland for six months and forestlands for a year. This is to prevent land dealings aiming at differences of market conditions in a short period.

The government plans to notify the National Tax Service next week after selecting people under suspicion of land speculation in the Metropolitan area and Chungcheong province from April through December of last year.

In addition, it will discuss whether or not it will select land speculation areas in 44 areas, including a proposed site for a new administration capital city and new city development areas near Seoul where the land prices have skyrocketed lately, after holding a committee meeting for stabilizing real estates prices later this month.

The proposed sites constitutes 24 areas including Joong-Gu and Yongsan-Gu of Seoul, 14 areas including Soojeong-Gu and Bundang-Gu of Seongnam City, and 4 places including Yeonki County of Asan City, Cheongwon County in Chungbuk, and Gijang County in Busan.

Meanwhile, land prices rose 1.45 percent on average from October through December of last year and totaled a 3.43 percent increase for the year. The annual rate of increase in land prices was 8.98 percent in 2002.

Jae-Seong Hwang jsonhng@donga.com