Measures to help renters, landlordsAs part of efforts to provide more stability to non-homeowners and also to boost private rentals, the Ministry of Land, Infrastructure and Transport said yesterday that landlords will be encouraged to offer long-term residential leases at prices that don’t go up more than 5 percent a year.
If they sign such contracts, the landlords will receive various tax benefits from the government, including a cut in their property and other taxes.
According to the Land Ministry, non-homeowners will be offered leases on privately owned residences in which they are guaranteed the fixed 5 percent deal for at least 10 years.
Under previous schemes, private rentals have been offered to tenants for five years and prices have fluctuated depending on the real estate market.
“This will offer non-homeowners stability in their residential conditions,” said an official from the Land Ministry.
“It is also intended to bring in more private units into the real estate market and more housing supply,” he said.
The government has been trying to energize the comatose real estate market and also to stabilize prices of jeonse, or long-term deposit, housing and the monthly rental market.
Since the start of the Park Geun-hye administration, it has announced two big policy measures to boost the real estate market in April and in August. There has been very little impact, which the government blames on the National Assembly for stalling the bills.
For the landlords, the government will offer tax exemptions and loans at lower interest rates. This is meant to encourage apartment and house owners to come into the market, and increase the rental housing supply.
The ministry said that landlords that offer long-term rent to non-homeowners will receive more exemptions in acquisition, property, transfer income and comprehensive real estate taxes than normal landlords.
They will also be offered loan support from the national housing fund when buying houses to lease or remodel.
The annual interest rate for loans from the fund is 2.7 percent.
The residences subject to tax benefits will have to be smaller than 85 square meters (278 square feet) and purchased after April 1 of this year.
“Most of the incentives, however, will be provided to the landlords from next month when tax-related bills and the 2014 budget pass in the National Assembly,” the official said.
BY LEE EUN-JOO [firstname.lastname@example.org]