Capital Relocation Committee Reveals Anti-Speculation Measures

Residents of the venue for a new capital will be granted new housing sites a year ahead of the redevelopment of their current housing sites.

Yongi-Gongju, South Choongcheong Province, the venue for a new capital, will be designated as overheated speculation areas, where the resale of preconstruction purchases of houses will be banned.

The Presidential Committee on Executive Capital Relocations finalized a comprehensive anti-speculation measure at a meeting on preemptive measures against real estate on July 11.

In a move to forestall the false establishment of residence, the committee will strengthen the regulations on the supply of housing sites in the venues for a new capital and its neighboring areas to the level of the Seoul metropolitan areas: it will give those residents who have lived in the area planned for development for one year or longer since the announcement of a new development project the right to purchase units in their newly developed area.

In this way, when new development sites are announced in October or November of this year, those who moved to the area after October or November of last year will not be given a new housing site.

While it will designate Yongi County, Gongju City, and Gyeryong City as overheated speculation areas, the committee will finalize a decision on whether to designate Nonsan and Gongju suburbs as overheated areas after further observing the real estate market trends there.

The committee is mulling designating the surrounding areas of Yongi, Nonsan and Gyeryong as speculative hot zones, if necessary

In overheated areas, resale of preconstruction purchases is banned, and ownership transfer tax is levied based on the market value of the real estate asset.

The committee will conduct thorough investigations into lawbreakers who falsely establish residence, purchase an excessive volume of real estate assets, and buy preconstruction purchases, and will strictly sanction them.

“We are currently investigating the financial sources of a total of 728, including 186 on suspicion of land speculation, 174 for allegations of massive purchases and prior transfer ownership of real-estate properties, and 241 who purchased properties despite their lack of financial means,” the committee said.

“Once his or her false establishment of residence is revealed, the perpetrator’s registrar and purchase of a preconstruction housing unit will be cancelled,” it said. “We will comprehensively monitor whether land allowed to be purchased and sold are being developed for reasons for which it was permitted to be marketed, and we will investigate daily on the resale of preconstruction purchases and levy penalties accordingly.”

Cheol-Yong Lee Kwang-Hyun Kim lcy@donga.com kkh@donga.com