Seoul Homeowners Who Never Lived in Property Barred From Second Home Loans

South Korea is tightening its real estate regulations, aiming to curb speculative investment. Starting January next year, individuals who own a single apartment in the Seoul metropolitan area but have never lived in it will be barred from obtaining government-backed loans for a second property.

The Financial Services Commission announced the new policy on December 13 as part of a broader package to stabilize the real estate market. The regulation specifically targets "speculative" non-resident single homeowners. These individuals will be restricted from receiving guarantees from institutions like the Korea Housing Finance Corporation or the Housing & Urban Guarantee Corporation. Without these guarantees, banks typically do not offer such loans, effectively cutting off the primary avenue for obtaining them.

The new rules apply to single-homeowners with apartments in the Seoul metropolitan area or other designated regulation zones. However, exceptions exist. The restrictions do not apply if the owner or their spouse has previously resided in the apartment, or if the property has been leased to family members. The policy is designed to specifically target " " investments, where buyers use other people's rental deposits to purchase properties.

Some exceptions allow for loans in specific circumstances. These include situations where actual residency is legally required, such as when purchasing a property in a designated land transaction permit zone and leasing it to existing tenants until their contract ends. Loan extensions are also permitted if the landlord cannot repay the deposit. Additionally, loans may be allowed if unavoidable reasons for not residing in the property are recognized by a financial institution's loan review committee.

The Financial Services Commission plans to implement these regulations from January 1. Previously, loan guarantees were only restricted for multi-homeowners and those acquiring apartments in speculative or overheated areas.

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If you have never resided in the apartment, you are subject to regulation, but if you have moved your address even once, you are not.