New Restrictions on Additional Home Mortgage Loan

Home mortgage lenders will no longer be able to request additional loans under the name of their spouse or children when they buy a house located in the property speculation area.

Also, the National Tax Service (NTS) will launch a standing body exclusively responsible for investigations related to property speculation.

On August 24, the ruling Uri Party and the government held the seventh consultation to discuss real estate policies and reached an agreement to come up with these measures along with other new ones to reinforce a tax system and provide more housing.

The government has decided to add a new restriction on qualifications for home mortgage lending by allowing only one loan per household. This aims to stop practices of one household receiving several home mortgage loans under several different family members’ names.

Therefore, the number of home mortgage loans that a household can take is limited to one in principle.

However, the measure allows an exception of additional loans per family when a family member of a household is capable of paying the principle and interest on one’s own, which is to protect end users.

The government has also decided to set up a real estate transaction investigation office in the NTS and two divisions exclusively focusing on the investigation on real estate transactions at every regional office.

Not only that, the consultation, in order to provide more housing within the metropolitan area, has decided to expand gradually the annual provision of six million pyeong of housing lots by three million pyeong for the next five years for a total of nine million pyeong every year.

Kyung-Joon Chung Ki-Jeong Ko news91@donga.com koh@donga.com