One day, the news mentions the name of our neighborhood: it has been designated a land transaction permit zone.
It is confusing: Does this mean buying and selling homes is completely blocked? Do people who already live there need to do anything?
In short, only three things change.
3-Line Summary
1. In a land transaction permit zone, you must obtain permission before buying.
2. Residential properties carry a 2-year owner-occupancy requirement, so you cannot buy them with a jeonse lease in place.
3. A contract made without permission is void from the outset.
First, whether your home is covered
Whether permission is required depends on the land area. It is not the home price or the size of the unit, but the size of the land on which the home sits.
The basic thresholds set by law are as follows.
| Location | Permission required if this area is exceeded |
|---|---|
| Urban residential area | 60㎡ |
| Commercial or industrial area | 150㎡ |
| Green area | 200㎡ |
| Farmland outside urban areas | 500㎡ |
| Forest land outside urban areas | 1,000㎡ |
| Other land | 250㎡ |
There is one catch: the authority designating the zone may lower these thresholds to as little as 10%.
Seoul has done this. For apartments in Gangnam, Seocho, and Songpa districts and Yongsan District, it set the residential-area threshold at 6㎡, or 10% of 60㎡. The commercial-area threshold is 15㎡.
An apartment’s share of the underlying land is usually far larger than this. In practical terms, that means almost all apartments become subject to permission.
So even if you see “over 60㎡” in the news, you need to check the local government’s public notice to know the figure that actually applies in your neighborhood.
What comes with permission
This is the core of the system. Permission is not a procedure that ends with getting a stamp of approval.
You must actually use the property for the approved purpose for a specified period.
| Use | Required period of use |
|---|---|
| Residential use | 2 years |
| Farming | 2 years |
| Forestry | 3 years (5 years if there is no income) |
| Development or business use | 4 years |
| Conservation purpose | 5 years |
If you buy a home, you must live in it yourself for 2 years. During that time, you cannot rent it out or resell it.
This is why buying a property with a jeonse lease in place is barred in these zones. That is also precisely what the system is designed to target.
You cannot apply alone
The seller and buyer must submit the permit application together to the mayor, county head, or district head. It is not a document that only one party submits.
A decision on whether to grant permission is issued within 15 days of the filing date. If permission is denied, you may file an objection within one month.
Properties transferred through inheritance, gifts, or auctions, as well as land below the area threshold, are excluded from the permit requirement.
What happens if you violate the rules
There are three paths.
If you entered into a contract without permission, the contract is void. It is not revived by obtaining permission later; it is considered to have had no legal effect from the beginning.
Criminal penalties also apply: up to 2 years in prison or a fine of up to 30% of the land price. The same applies if permission was obtained through falsehoods.
If you obtained permission but did not use the property as promised, an enforcement charge is imposed. During the mandatory-use period, it may be imposed each year up to 10% of the acquisition price. It is not paid once and finished; it is imposed annually until you comply.
Why does this system exist?
When a development plan is announced, land prices begin to rise. But to carry out the development, the land must be acquired—and at the higher price.
As compensation costs rise, projects become more difficult, and the burden ultimately returns through sale prices or taxes.
That is why areas slated for development are restricted in advance during the planning stage. The goal is to allow only people who will actually use the property to buy it.
A designation may last up to 5 years at a time. It may be redesignated if the reason for it remains.
An area restricted for 4 years
Sapgyori, Sapgyo-eup, Yesan County, South Chungcheong Province, is one such case.
It was first designated in August 2022 as the Naepo Station-area urban development project was planned. The period was scheduled to end on the 6th of this month, but South Chungcheong Province extended it for 2 more years following deliberation by the Urban Planning Committee. It runs from August 7 through August 6, 2028.
The area covers 2,165 parcels, 16만 393㎡—that is, 160,393 square meters.
The reason for the extension stands out: the project is still at the stage before land compensation. Because compensation has not been completed, authorities concluded that room remains for speculative demand to enter.
Although an area can be designated for up to 5 years at a time, this amounts to extensions in 2-year increments. It means authorities will assess how far the project has progressed and decide again at that point.
What to check before signing a contract
The area threshold that applies in your neighborhood. Check the figure stated in the local government’s public notice, not the law’s default threshold.
The date the designation period ends. It may be extended or lifted.
Covered property types. As in Seoul, a designation may cover only apartments, or it may cover all land.
Permission before the contract. If the order is reversed, the contract itself is void. This is the biggest trap.
The term land transaction permit zone may sound like it blocks transactions, but in practice, it is closer to a system that sets conditions for who may buy.
Those who will actually live in or use the property obtain permission and buy it. Those waiting for the price to rise must remain tied up for 2 to 5 years. That difference is what the system is intended to screen out.
Sources
- Seoul Real Estate Information Plaza Guide to the Land Transaction Permit System
- Seoul Real Estate Information Plaza Current Status of Land Transaction Permit Zone Designations
- Aju Business Daily South Chungcheong Province Extends Land Transaction Permit Zone for 160,000㎡ in the Naepo Station Area by 2 Years
- Good Morning Chungcheong Naepo Station-area Land Transaction Permit Extended by 2 Years
- Asia Economy Gangnam, Seocho, Songpa, and Yongsan Districts Redesignated as Land Transaction Permit Zones for 1 Year and 3 Months
- Ministry of Land, Infrastructure and Transport Guide to Land Transaction Permit Zones
This article explains the system and does not recommend or discourage transactions in any particular area. Area thresholds and designation periods differ by zone and can change at any time, so before an actual transaction, please check the relevant city, county, or district office notice and confirm with the responsible department.