Reasons for Proposal
Reason for proposal and main contents
Current Act prescribes that the Minister of Land, Infrastructure and Transport may prohibit or restrict the individuals, corporations, groups, or governments of the countries, which prohibit or restrict the people, corporations, groups, or governments of Republic of Korea from acquisition or transfer of the land in their countries, from acquisition or transfer of the land in Republic of Korea according to the Presidential Decree.
However, foreign countries including China, etc. restricts land transactions strictly but, in case of Korea, foreigners’ land transactions in the only cases of military facility protection zones and ecological/scenery preservation areas, etc. and there is little limit in acquisition of land. In addition, in case of speculation-ridden areas and adjustment areas under Housing Act, domestic persons are restricted from acquisition of land by such method as loan regulation, etc. but foreigners may acquire land without any specific restriction in funding excluding some reporting procedures.
In relation to this matter, according to the statics of Korea Real Estate Board, accumulated building transactions by foreigners, including Chinese were 21,048 cases last year with increase by 18.5% (3,285 cases) compared with the previous year and were the largest cases since survey in January, 2006; therefore, it is pointed out that foreigners’ land transactions should be restricted.
Therefore, it is intended to stabilize real estate market by the method that the principle of reciprocity among countries is applied to not only land but also buildings, especially in case of residential real estate, the principle of reciprocity is applied by the same range of allowance with corresponding countries, and foreigners’ land transactions in speculation-ridden areas or adjustment areas require permission (Article 7 and Article 9 of draft).