On the 11th, the Seoul Metropolitan Government said, “We have decided to provide temporary loan interest support to households facing a surge in jeonse prices due to the Lease Act. We plan to proceed with consultations with the agency as soon as possible,” he said.
After the lease 2 Act (right to apply for contract renewal and limit system for previous month) came into effect on July 31, 2020, the Seoul Metropolitan Government announced that the contract of tenants who exercised the right to apply for contract renewal, which is the ‘right to extend the global contract at a rate of increase of up to 5% for two years,’ As the expiry date approaches in August of this year, it is diagnosed that the burden on the Jeonse tax may increase. When landlords sign a new jeonse contract this year, they judged that there is a possibility of a sharp increase in the jeonse price by reflecting the increase in the jeonse price over the past two years as well as the expected increase in the next four years.
To reduce the burden on tenants, the Seoul Metropolitan Government will provide interest support up to 3% per annum (with a minimum interest rate of 1% or more) for low-income households who need to sign a new contract by using the contract renewal application right, within the maximum loan limit of KRW 300 million. did with
The target of support is homeless tenants whose renewal contract expires between August of this year and July of next year because they have already exercised their right to apply for contract renewal. It provides temporary support for up to two years and provides more interest to low-income households by applying different interest rates for each income category.
An official from Seoul said, “It is a concept that pays part of the interest on the jeonse loan instead of the support for the jeonse deposit. It means that you only have to bear the burden of a 2% interest rate.”
In addition, the government plans to propose amendments to the law to revive registered private rentals and strengthen tax support for private rental companies.
The Seoul Metropolitan Government amended the Enforcement Decree of the Comprehensive Real Estate Tax Act to revive the short-term (4 year) private lease, which was abolished after the July 10 measures in 2020, to expand the supply, and at the same time allow private registered rental business operators to exclude the total real estate tax in the area subject to adjustment. We plan to suggest.” However, apartments are still excluded from short-term private rentals.
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