Over Six Months of Residence Required to Make Purchases in Land Transaction Permission Zones

Starting this September, one will have to live in a designated zone for land transaction permission for a minimum of six months in order to purchase forest land within the area.

Furthermore, starting next year, one will have to pay fines totaling as much as 20 percent of declared land price if one is discovered to be using his or her land within the land transaction permission zone for purposes different from their initial statement.

On May 6, the Ministry of Construction and Transportation announced that it would push forward with land market stabilization policies including such plans.

Strengthening the Land Transaction Permission System-

Further restrictions on the conditions necessary for acquiring forest land within the permission zone have been changed from “residents of cities or counties where the land is located, or in cities or counties neighboring the land” to “residents in cities or districts where the land is located.”

In addition, one will have to submit a land usage declaration that proves he or she will be the end user, and get permission from the head of the city, county, or district. It is hoped that this will make it more difficult for those who are not the end-users of the land to purchase land within land transaction permission zones. A similar system is already in place for farmland.

Land transaction permission zones take up 4.63 billion pyeong, or 15.5 percent of the nation’s territory. A vast majority of the Seoul Metropolitan Area, the administrative capital, and industry cities are included in such zones.

If one gets permission to purchase land for farming, and uses the land for other purposes such as constructing illegal buildings, he or she will have to pay 20 percent of the land prices at a maximum in fines. The current fines are only less than five million won.

Areas where large-scale development projects are expected will immediately be designated as land transaction permission zones as the development projects are formulated, thereby blocking any speculative transaction attempts in the first place. Considering that land prices start to soar as soon as projects are made public, it is ineffective to impose regulations when development projects are fully confirmed.

Home-building, industrial and tourist complex, and urban redevelopment plans are subject to such government policies, which also include deregulations on military facilities, water source protection areas and restricted development zones.

Stepping Up Efforts to Designate Speculative Zones-

Starting from this month, real estate speculation zones, which have so far been designated every three months, will be designated every month. When an area is classified as a speculative zone, transfer income taxes for the area are imposed based on real transaction prices.

In the cases where the land prices of a certain area keep surging, even after being designated as land transaction permission zone, the government plans an early classification of such areas as speculative zones. The Ministry of Construction and Transportation considers “an increase in land prices for three straight months” as the criteria for such a designation.

Sang-Rok Lee myzodan@donga.com