Gyeonggi Province Designates Land Transaction Permit Zones Covering 23 Cities and Counties for Foreigners and Corporations

[Suwon Ilbo = Reporter Park No-hun] All 23 cities and counties throughout Gyeonggi Province have been designated as land transaction permit zones for foreigners and corporations. However, this applies only to cases where land containing residential buildings is acquired. Through this measure, the province aims to block speculative real estate transactions by foreigners and corporations, who have recently emerged as major players in the real estate market.

On the 23rd, Gyeonggi Province held a Gyeonggi Province Urban Planning Committee meeting and approved a plan to designate an area of 5,249.11 square kilometers across 23 cities and counties, including Suwon, as land transaction permit zones for foreigners and corporations from October 31 to April 30, 2021, for a period of six months, it announced on the 26th.

As a result of deliberation, eight cities and counties—Yeoncheon County, Pocheon City, Dongducheon City, Gapyeong County, Yangpyeong County, Yeoju City, Icheon City, and Anseong City—were excluded, as they have relatively low volumes of real estate transactions by foreigners and corporations and low speculation risks as border regions and rural agricultural and fishing areas.

The province published the details of the permit zone designation in the Gyeonggi Province Gazette and notified relevant cities and counties, the competent district courts, and the Ministry of Land, Infrastructure and Transport.

Accordingly, when foreigners and corporations acquire land containing residential buildings within the land transaction permit zone, they must obtain permission from the relevant city or county mayor. Violations will result in imprisonment of up to two years or a fine not exceeding 30 percent of the individual public notice land price at the time of contract execution.

The province's measure comes amid a sharp increase in real estate transactions by foreigners and corporations, with a significant portion of the real estate they acquire intended for speculation rather than actual use.

Previously in September, the province stated that foreigners and corporations with substantial capital have already become major players in the land and housing market, acting as a factor driving up real estate prices, and announced its plan to pursue regulations for real estate market stabilization.

Gyeonggi Province explained its reason for limiting the scope of regulations was to reduce administrative burden on government agencies, prevent side effects such as demand shifting to Seoul and Incheon regions due to the balloon effect, and minimize inconvenience to ordinary citizens' normal real estate transactions.

A provincial official stated, "With this measure, acquisition will be permitted only to end-users, and given the characteristics of the land transaction permit system where the obligation to use the land for the permitted purpose arises, we expect a blocking effect on speculative demand by foreigners and corporations within the relevant cities and counties."