Starting next month, a 6-year short-term registration rental housing system for non-apartment dwellings such as multi-family and mixed-use dwellings will be implemented. If a person owning one dwelling registers a non-apartment for short-term rental, they can apply for the one household, one dwelling exception.
This system was revived five years after being abolished due to concerns that it could be used as a means of speculation and tax evasion.
The Ministry of Land, Infrastructure and Transport noted on the 28th that it is introducing a 6-year short-term registration rental housing system for non-apartments according to the revision of the 'Private Rental Housing Act'. The revised plan will be implemented from the 4th of next month.
Short-term registration rental housing allows rental businesses to register dwellings and rent them out for a short period while receiving various tax benefits, such as exemption from aggregate property tax and capital gains tax exemptions. However, it enforces a mandatory rental period and limits on rent increases.
The beneficiaries of the tax benefits are non-apartments with a construction-type publicly announced price of 600 million won or less, and a purchase-type value of 400 million won or less (200 million won or less in non-capital areas). The corporate tax exemption applies only to construction types.
The short-term rental system was previously abolished in 2020 after criticism that it was used as a means of speculation and tax evasion. The system, reintroduced after five years, has an extended mandatory rental period of 6 years, which is 2 years longer than when the previous system was implemented, and apartments are excluded.
The government will allow short-term registered rental housing providers to easily change their type to long-term rental housing. In cases where a short-term rental housing is converted to a long-term rental housing, the entire rental period of the originally registered short-term rental housing will be recognized as the mandatory rental period.
Along with this, the Ministry of Land, Infrastructure and Transport has strengthened the criteria for mandatory enrollment in rental guarantees for rental businesses. When estimating the housing prices for rental guarantees, differences in the application ratio of publicly announced prices will depend on the type and value of the dwellings.
Previously, if a villa with a publicly announced price of 200 million won enrolled in rental guarantees, it was recognized as up to 300 million won, which is 150%. However, in the future, for multi-family dwellings worth less than 900 million won, it will be 145%, and for those worth between 900 million won and 1.5 billion won, it will be 130%, adjusting the publicly announced price application ratio.
A liability ratio benchmark of 90% will also apply. The liability ratio is the value obtained by dividing the rental deposit and the amount of mortgage established by the housing price. If there is no mortgage established, a villa with a publicly announced price of 200 million won (housing price of 300 million won) can enroll in the rental guarantee if the rent is 270 million won or less.
The government plans to use the 'Ministry of Land, Infrastructure and Transport acknowledged appraisal price' as the benchmark for estimating the house price for rental guarantees to prevent short-term registered rental housing from being misused as a means of rental fraud. Previously, there were concerns about rental fraud through inflated appraisal prices due to the housing price criteria when enrolling in rental guarantees.
If the house owner files an objection claiming that the publicly announced price is excessively low compared to the house price, and if the Ministry of Land, Infrastructure and Transport acknowledges the objection, they will assess the house price based on the appraisal value. The appraisal value will be determined by an appraisal agency commissioned directly by the Ministry of Land, Infrastructure and Transport.
The revised method for estimating housing prices will apply from the applications for enrollment in rental guarantees received after the 4th of next month. The previously registered private rental housing will be subject to the revised criteria starting July 1, 2026.
Lee Gi-bong, head of the housing welfare policy division at the Ministry of Land, Infrastructure and Transport, said that through the 6-year short-term registration rental housing system for non-apartments, conditions have been established to activate the supply of non-apartment private rental housing, which acts as a support ladder for ordinary citizens. He added that by accurately estimating the housing prices that set the rental guarantee enrollment standards, it is expected that rental fraud or guarantee accidents targeting tenants will significantly decrease.
Additionally, the Ministry of Land, Infrastructure and Transport has established regulations concerning the selection of restoration targets and the calculation of restoration costs in the 'Private Rental Housing Act Enforcement Rules' to prevent disputes arising when rental businesses demand excessive restoration costs when tenants vacate.
Rental businesses and tenants together verify the condition of facilities upon moving in and out to select restoration targets. The costs borne by the tenant will be determined by mutual agreement. The repair costs should be calculated based on actual costs, considering the depreciation rate according to the age of the facilities.
The Ministry of Land, Infrastructure and Transport plans to begin a study service next month to prepare specific guidelines and aims to establish these by the first half of next year.
Furthermore, the Ministry of Land, Infrastructure and Transport has made it possible for municipal officials to utilize the reported information on housing rental contracts and the details of rental guarantee enrollments directly by tenants. Additionally, it allowed municipalities to request the court to delete auxiliary registrations either ex officio or upon request from interested parties.