South Korea Extends Move-In Grace Period in Land Permit Zones to the End of 2027

South Korea's Ministry of Land, Infrastructure and Transport has extended the move-in grace period for buyers in land transaction permit zones by a year, pushing the application deadline from the end of 2026 to the end of 2027 and widening the deferral to cover a lease renewal. The ministry announced the change on 17 September and placed the amending rules under public notice on 18 September, with an effective date of 1 October.

What changed

Land transaction permit zones oblige a buyer to obtain prior approval for the purchase and then live in the property for at least two years. That obligation collides with a very common situation in the Korean market: the unit already has a sitting tenant on a jeonse lump-sum deposit lease, and the buyer cannot move in until that lease ends.

A measure introduced in May allowed a qualifying buyer to defer moving in until the tenant's remaining lease term expired. Two things have now changed. The deadline to apply for that deferral moves from 31 December 2026 to 31 December 2027. And the deferral no longer stops at the remaining term: it now also covers one lease renewal of up to two further years. Taken together, a buyer can push the move-in date out by as much as three years and three months.

The conditions are unchanged. The buyer must be a non-homeowner and must have held no home continuously since 12 May. After finally moving in, the two-year residence requirement still runs.

The mechanism

The extension is being made through an amendment to the rules under the real estate transaction reporting law rather than through new primary legislation. The Ministry of Land, Infrastructure and Transport issued the proposed amendment for public notice on 18 September and set 1 October as the implementation date, which leaves a short comment window before the rule takes effect.

This is the second revision to the same measure in four months, and that frequency has drawn criticism inside Korea. A Woori Bank analyst quoted by the Seoul Economic Daily said the waiver should have some effect on the frozen rental market but warned it could reduce rental supply at the same time. Other commentary in the same report argued that repeated revisions are eroding confidence in the policy and that the owner-occupancy purpose of the permit system has become meaningless.

What it means for a foreign buyer

Foreign buyers sit under a parallel and stricter designation. In August the ministry extended the separate foreign-buyer land transaction permit zones for a further year, running from 26 August 2026 to 25 August 2027. Those zones cover all of Seoul, 23 cities and counties in Gyeonggi Province and nine Incheon districts, and they apply to apartments, detached houses and multifamily homes.

Under that designation a foreign buyer must obtain approval before completing a purchase and must disclose the source of funds, visa status and intended use of the property. Approved buyers are generally required to relocate within four months and to live in the property for at least two years. Since 10 February 2026 a revised enforcement decree has additionally required foreign buyers in permit zones to file a financing plan with proof of how the money was secured, including overseas loans, foreign bank deposits and the names of the foreign financial institutions involved.

The practical reading is narrow. The September extension eases the timing problem for a buyer who cannot displace a sitting tenant, but it does not touch the residence obligation itself, and the four-month relocation expectation attached to the foreign-buyer designation is a separate requirement. A non-resident buying a Seoul apartment purely for rental income still has no route through the permit zones. Anyone relying on the deferral should confirm its application with the district office issuing the permit before signing, because the grace period and the foreign-buyer approval run on different instruments and different calendars.

Context

The current permit regime dates from October 2025, when the government designated all 25 Seoul districts and 12 areas in southern Gyeonggi Province, including Gwacheon and Gwangmyeong, as land transaction permit zones. At the time weekly Seoul apartment price growth had accelerated to 0.27 percent from 0.08 percent in late August. The same package capped mortgage borrowing at 600 million won for homes valued up to 1.5 billion won, 400 million won for homes between 1.5 billion and 2.5 billion won and 200 million won above that, with a 40 percent loan-to-value ceiling for first-time buyers.

The controls have had a visible effect on foreign demand. Foreign transactions across the three regions fell 27 percent from September through June, with Seoul down 37 percent, Gyeonggi down 23 percent and Incheon down 29 percent. Chinese nationals accounted for 72 percent of foreign purchases over that period and American nationals for 13 percent.

Korea has been layering holding-tax and capital-gains changes on top of these transaction controls, including the decision earlier this month to leave the 1.2 billion won property tax deduction in place for non-occupying owners. The direction across the region is not uniform: Taiwan's central bank moved the other way this month by raising its second-home mortgage cap to 70 percent, while the Bank of Japan lifted its policy rate to 1.25 percent.