The government has unveiled a package of measures to maximize short-term private rental supply, including extending a tax exemption for purchases of small newly built non-apartment homes. The plan aims to flexibly expand the private non-apartment stock — which serves as an alternative to apartments — and launch a "jeonse and monthly rent safe trust" program within the year to stabilize the rental market.
Under the "Housing Rapid Supply Plan for Stabilizing the Jeonse, Monthly Rent and Sales Markets" announced Thursday by the Ministry of Land, Infrastructure and Transport, a special provision excluding newly built small homes — including officetels — from household counts when calculating acquisition tax, capital gains tax and comprehensive real estate tax will be extended by one year through December next year. The exemption applies to first-time buyers of newly built homes of 60 square meters or less, completed between January 2024 and December 2028, priced at 600 million won ($424,000) or less in the Greater Seoul area and 300 million won or less in other regions, excluding apartments.
The ministry will also ease restrictions on floor area and eligible occupants to allow knowledge industry centers to be converted to various residential uses, including officetels and dormitories. The share of support facilities will be temporarily expanded for two years — from 30 to 50 percent inside industrial complexes, from 30 to 50 percent in the Greater Seoul area, and from 50 to 70 percent outside it — and residents other than workers at tenant companies will be permitted to live in such facilities. Acquisition tax will be waived on major renovation costs when non-residential properties such as commercial buildings are converted to residential use.
Construction standards for multi-family and multi-unit housing will also be rationalized to accelerate non-apartment supply. The floor area cap will rise from 660 to under 1,000 square meters, the story limit for multi-unit homes will increase from three to four floors, and vertical construction will be permitted for four- and five-story buildings under sunlight standards. Shared resident facility area requirements will be eased, and construction loan limits will rise from 70 million won to 90 million won while the interest rate drops from 3.5 to 3.2 percent to expand supply capacity.
Loan regulations for rental business operators purchasing newly built non-apartment homes will also be loosened. To stimulate small-scale housing pre-sales, the deadline for new home builders to qualify for an acquisition tax surcharge exemption will be extended from five to seven years after purchase. At the same time, the public sector will expand the use of modular construction to increase public housing output from 12,000 to 20,000 units while cutting construction time from two years to one and a half.
To address the jeonse and monthly rent shortage, the government plans to increase the supply of affordable pre-sale homes and long-term rental housing.
For young people, an "affordable public pre-sale model" will be introduced. Given that current public pre-sale prices in regulated zones — around 600 million won — are difficult for people in their 20s and 30s to afford, about 15 percent of public pre-sale units will be offered through equity-accumulation or profit-sharing schemes. The aim is to strengthen the housing ladder so that low-asset households can also achieve homeownership.
![Seoul's residential landscape as seen from the "63 Sky Picnic" observation deck atop the 63 Building in Yeouido, Yeongdeungpo-gu, Seoul, on Monday. [Yonhap]](https://wimg.heraldcorp.com/news/cms/2026/08/13/rcv.YNA.20260810.PYH2026081009650001300_P1.jpg)
The government will create a new "universal public rental housing" category open not only to low-income households but also to young people without homes and the general public, offering a standard six-year tenancy extendable to a maximum of 20 years. Units will be supplied at transit-oriented locations in the third-generation new towns — starting with the Namyangju Wangsuk S-10 block (883 units) breaking ground next year — as well as in central Seoul, and a youth-exclusive town of 11,000 units will also be built.
To ensure a stable long-term private rental supply, the government will provide financial support and ease rent regulations to encourage operators to run properties for 20 years or more. Under 10-year rental contracts, rent increases are currently capped at 5 percent even when tenants change; under 20-year contracts, landlords will be allowed to adjust rents to 95 percent of the market rate when tenants change.
A new "universal youth jeonse rental" scheme will raise the jeonse support limit for young people without homes from 120 million won (with 95 percent financing) to 240 million won (with 90 percent financing), with additional units allocated by lottery. Beyond that, specialized rental housing for young people, newlyweds and the elderly will be expanded to 7,500 units by 2030, with a target of supplying more than 2,000 youth-type and 1,000 childcare-friendly units this year.
For the jeonse deposit return guarantee, the income eligibility ceiling for young people will rise from 50 million won to 65 million won in annual income, the deposit ceiling will increase from 300 million won to 700 million won in the Greater Seoul area and 500 million won elsewhere, and the maximum subsidy will be raised to 1 million won.
The government presented the measures to broaden affordable housing options and strengthen private rental supply capacity. However, analysts note that the package has limits in resolving the Greater Seoul jeonse crunch in the short term, given that the shortage was partly triggered by landlords moving back into their own properties.
Kim In-man, director of the Kim In-man Real Estate Economic Research Institute, said the current jeonse and monthly rent shortage is not solely a supply problem. "There should have been more concrete discussion about pricing — such as half-price pre-sales for certain units — and measures that can stabilize sentiment in the rental market," he said.
Kim Hyo-seon, a senior real estate specialist at KB Kookmin Bank, said resolving the current rental supply shortage requires additional support for the private rental market on top of measures to increase short-term purchase-rental supply. "The circulation of older housing stock is not smooth due to demand suppression, and the rental supply from older homes faces obstacles from regulations and taxes — additional support measures will be needed to address that," she said.
hope@heraldcorp.com
