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| A villa cluster area in downtown Seoul viewed from Seoul Sky, Songpa-gu, Seoul. 2020.12.30/News 1 © News1 Reporter Sung Dong-hoon |
Ahead of the meeting of the ministers concerned for the inspection of the real estate market, the government office began to search for a solution for housing supply. The ruling party, which said that it had never considered easing the capital gains tax, came up with a change in the use area of Seoul.
This is a method of increasing the floor area ratio by replacing general residential areas in Seoul or commercial areas, and semi-industrial areas into residential areas.
However, if the plan to change the use is actually implemented, a considerable amount can be supplied, but there is a disadvantage that it must go through procedures such as committee deliberation, and it may take time for housing supply to be decided.
◇15th inspection meeting held… Station area, usage change, maintenance project supply plan, etc.
According to the National Assembly and government officials on the 12th, heads of related ministries including Hong Nam-ki, Deputy Prime Minister of Economy and Ministry of Strategy and Finance, and Minister of Land, Infrastructure and Transport Byun Chang-heum will hold a real estate inspection meeting on the 15th. The Real Estate Inspection Meeting is a consultative body between ministries organized last year.
Previously, it was held every Wednesday, but the number decreased to every other Wednesday. Through the inspection meeting, various policies such as basic consultation contents and pre-generation measures were discussed and released. As it goes through the process of coordinating policies with the ruling party in advance, the weight of the unified policy of the party administration also appears.
The reason that the inspection meeting held on Wednesday was delayed to this Friday is interpreted because time was required for coordination between the party administrations. Deputy Prime Minister Hong Nam-ki said on the 10th, “We plan to examine the supply of housing through expansion of redevelopment and reconstruction announced last year at the Ministerial Relations Meeting on Real Estate Market Inspection, and discuss ideas for additional housing supply for the station area.”
It is expected that the detailed plans for high-density development in the metropolitan area, previously revealed by Minister Byeon Chang-heum, will be drawn at this meeting. The plan is to expand the radius of the subway station area from 350m to 500m, increase the average floor area ratio of the station area from 160% to 300% and up to 700%, and then apply the idea of revitalizing the housing supply.
Following the high-density development plan for low-density residential areas, a plan for reusing the residential area, which is more complicated and complicated by procedures, is also being materialized. Hong Ik-pyo, chairman of the Democratic Party’s Policy Committee, said on KBS Radio that day, “We are discussing measures with the Ministry of Land, Infrastructure and Transport to dramatically increase supply to the metropolitan area centered on Seoul through densification or repurposed.”
For example, a method of increasing the floor area ratio by substituting a general residential area or converting a semi-industrial district into a residential area in Seoul is influential.
The areas where housing is mainly supplied are residential areas, and residential areas are further classified into exclusive residential areas and general residential areas. The general residential area is subdivided into 1 to 3 areas depending on whether the housing supplied is low, middle or middle.
Commercial areas are classified into central, general, neighborhood, and distribution commercial areas, and industrial areas are divided into exclusive, general, and semi-industrial areas. In semi-industrial areas, in principle, it is not possible to build apartments other than dormitories, but the city of Seoul permits the construction of houses in semi-industrial areas if more than 60% of industrial sites are secured while developing through district unit plans or maintenance projects, etc. .
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| Minister of Land, Infrastructure and Transport Byeon Chang-heum listens to the remarks of Hong Nam-ki, Deputy Prime Minister of Economy and Ministry of Strategy and Finance at the 25th Emergency Economy Central Countermeasure Headquarters Meeting and the 8th Korea Pannew Deal Ministers’ Meeting held at the Government Complex in Jongno-gu, Seoul on the morning of the 6th. 2021.1.6/News1 © News1 Reporter Kim Myung-seop |
◇Scheduled to include simplified licensing procedures, easing transfer tax is still effective
It is known that the Ministry of Land, Infrastructure and Transport is preparing for prior consultations with the ruling party by devising a plan to recover additional profits arising from the change of the use area. In the maintenance project, policies that reflect the voices of the private supply market are also influential, such as simplifying the licensing procedure that can attract the private sector, easing the burden of financial costs for private businesses, and improving the criteria for evaluating high pre-sale prices by the Housing and Urban Guarantee Corporation (HUG).
Some predicted that the change of use area would be impossible without cooperation with the city of Seoul. It is decided through the deliberation of the city planning committee of the relevant local government, but the city of Seoul is negative about the change of the use area.
It is unlikely that the transfer tax easing, which the market expected, will be included in the inspection meeting. This is because the ruling party, fearing the retreat of the speculative regulation policy, is strongly expressing its unacceptable intention. “There is no plan to temporarily reduce or ease the transfer tax for multi-homed people. There is no discussion and no plans to review in the future,” said Kim Tae-nyeon, the leader of the Democratic Party.
However, it is still argued that if unrest in the housing market continues despite the government’s various supply signals, there is no choice but to choose measures to ease the transfer tax.
A government official said, “Inducing the sale of multi-homes by raising the ownership tax on one side and lowering the transaction tax on the other side is a desirable direction at this point in which supply is scarce.” “By next month, we need to review policies with large side effects such as unnecessary regulations and market distortions. I think it will be done steadily,” he said.