More property regulations eased

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More property regulations eased

The government will ease regulations on land transactions to boost the sagging real estate market, including a cut in the period for the mandatory use of lands for certain purposes.

The Ministry of Land, Infrastructure and Transport said in a press release on Monday that it will promulgate a new ordinance today that reduces the period of mandatory use of lands for their initial purposes to two years, such as for housing (from three years) and for social welfare facilities (from four years), after new owners buy them.

The new ordinance also lifted a restriction on ownership of lands for farming, stockbreeding, and forestry, which requires owners to reside in their lands for at least six months if they want to buy them.

The eased regulations apply only to lands “requiring government approval for transactions,” designated by the central government to prevent speculation and an overheating of the property market.

In 1985, in the midst of nationwide real estate boom, the government restricted some transactions.

People who want to buy land in certain areas had to get approval from a local government and then continue to use the property for the same purpose for a set period of time. After that, they were allowed to use the land for other purposes.

The easing of restrictions follows complaints from local governments and residents that they were too strict and were inhibiting sales.

In fact, the gross area of land requiring government approval to be purchased was about 20,000 square kilometers (7,722 square miles), or 20 percent of the entire land (100,000 square kilometers) in the country in late 2007, right before the global financial crisis that began in the United States.

Since the crisis, the ratio has gradually dropped to 0.47 square meters, or 0.47 percent of all the land in South Korea because of earlier deregulations.

The ordinance will also raise the ceiling of the floor area ratio, the ratio of a building’s total area to the size of the land it is built on, for school dormitories.

If a dormitory is built outside the land of a local school but in the downtown area of a city, the new rule raises the ratio to 250 percent from the previous 200 percent.

That means that a dormitory on a 100-square-meter plot of land can have 250 square meters of floor space at the maximum.

Similarly, for a factory built near an industrial complex, the ratio will be raised from 70 percent to 80 percent, the Land Ministry said.

BY KIM HEE-JIN [kim.heejin@joongang.co.kr]

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