Real-Time Issue · May 22, 2026

Seoul Property Zone Exemption Expanded — Owner-Occupancy Waiver Goes Live May 29

Non-Homeowners Only · Temporary Through December · Gap Investment Still Blocked / 5 Real Estate Strategies

What Is the Transaction Permit Zone (Tohe) — The Regulation Explained

The Ministry of Land, Infrastructure and Transport is expanding the owner-occupancy waiver within Seoul Transaction Permit Zones (토지거래허가구역) to cover all properties with active tenants. Following a deputy ministers’ meeting on May 22 and a cabinet meeting on May 26, the amended enforcement decree takes effect on May 29. Previously, buyers in these zones were required to move in immediately after purchase. Under the amendment, properties already tenanted as of May 12 can delay that obligation until the current lease expires.

Who Qualifies for the Exemption?

The eligibility conditions are strict. Sellers must have had the property tenanted as of May 12 — tenancies starting after May 12 are excluded. Buyers must have been continuously without their own home since May 12. Anyone who sold a home before May 12 and became a non-homeowner does not qualify. Registration must be completed within four months of receiving the permit. The waiver period runs until the first lease expiry, capped at May 11, 2028. After the waiver ends, the standard two-year owner-occupancy requirement applies in full.

Gap Investing Still Blocked — Non-Homeowners Only

The defining restriction is the “continuously without a home since May 12” requirement. Anyone who held a property on May 12 and subsequently sold it to become a non-homeowner does not qualify. This condition is applied strictly, with no exceptions. Critically, the owner-occupancy obligation is not eliminated — it is deferred. “The fundamental framework of the transaction permit zone remains intact,” a Ministry official stated at the May 22 briefing.

Market Impact on Gangnam and Seoul’s Hot Zones

Analysts expect a modest increase in listings and transactions involving tenanted properties in Gangnam, Seocho, Songpa, Yeouido, and Mokdong. However, supply and demand are rising simultaneously, making price direction uncertain. Markets are reading the change as a regulatory easing signal, but experts caution against over-interpretation. Areas outside the designated permit zones are unaffected, and any sharp surge in transaction volumes is considered unlikely.

Waiver Timeline and Compliance Schedule

The implementation schedule is as follows: ① May 22 deputy ministers’ meeting → May 26 cabinet meeting ② May 29: amended decree on real estate transaction reporting published and effective ③ Applications for transaction permits accepted through December 31, 2026 ④ Registration within four months of permit issuance ⑤ Owner-occupancy deferred until first lease expiry (capped May 11, 2028) ⑥ Two-year owner-occupancy obligation begins after the deferral period. Applies to designated zones in Gangnam, Seocho, Songpa, Yeouido, Mokdong, Yongsan, and Mapo.

Penalties for Violating Owner-Occupancy Rules

Violating the owner-occupancy obligation triggers an annual enforcement penalty of up to 7% of the property’s official assessed value. For a Gangnam apartment with an assessed value of ₩1.5B, that amounts to ₩105M per year. Always consult a qualified real estate attorney and tax advisor before proceeding. Failure to complete registration within four months of the permit will result in permit cancellation — a point that often catches buyers by surprise.

5 Investment Strategies for the Waiver Era

Five strategies to capitalize on the expanded waiver: ① Direct purchase in a permit zone — non-homeowners may apply from May 29; watch for distressed sales before lease expiry. ② Daewoo E&C (047040) — enter after confirming Gangnam rebuild contract; stop-loss at -8%. ③ Korea Land Trust (034830) — enter after confirming rising transaction volumes; stop-loss at -10%. ④ TIGER Real Estate Infrastructure High Dividend ETF (334700) — buy before quarterly ex-dividend, targeting 6–8% yield. ⑤ LX Hausys (108670) — enter on confirmed upward transaction trend; stop-loss at -10%.

Sources: Bloomberg Reuters Korea JoongAng Daily