Korean Regulated Zone Effects

This page does not produce an amount. It is a map of what changes when a neighbourhood is designated an adjustment target area (조정대상지역) or an overheated speculation district (투기과열지구). Designation does not sit in one statute; it reaches into several at once. Lending rules come from the financial regulator, acquisition and capital gains tax from 지방세법 and 소득세법, subscription and resale limits from 주택법 and 주택공급에 관한 규칙, and redevelopment rules from 도시정비법, and each of those provisions carries the condition "if the area is designated".

So you pick an area type and the table shows how each of its 13 items changes there, with a link to the calculator that produces the number where one exists. Here you find out what applies; the next calculator tells you how much.

Buyers, before signing. The same flat at the same price means a smaller loan, a higher acquisition tax and a residence condition on the one-home exemption if it sits in a designated area. Missing any one of those breaks the financing plan. People moving in from another region are especially prone to applying the rules of where they used to live.

Existing owners use it too, because when their area is newly designated or released they need to know what happens to the capital gains surcharge and the residence condition on their exemption. Anyone preparing a housing subscription should look once before applying, since the re-winning ban and the first-priority conditions differ by area type.

주택법 provides the basis for both designations, and the Ministry of Land, Infrastructure and Transport designates areas by public notice. Because the effects are scattered across many statutes, the table here reproduces the designation-effects summary that accompanied the government's housing market stabilisation measures. Which areas are currently designated changes with each notice, so check the latest one before you sign.

The logic is simple. For each item the data records whether a restriction applies in each of the three area types, and the page counts the restricted items for the type you chose. Adjustment target areas and overheated speculation districts restrict all 13 items; an undesignated area restricts 0. Where the two designations overlap, the stricter one applies item by item. Acquisition and capital gains surcharges key off the adjustment target designation, while the re-winning ban and redevelopment limits are heavier under the overheated speculation designation.

Note that each item has its own reference date. The acquisition surcharge looks at the date of acquisition, the capital gains surcharge at the date of sale, and the residence condition on the one-home exemption at whether the area was designated when you acquired the home. In periods of frequent designation and release, where your contract date, completion date and sale date fall decides the tax.

Take a first-time buyer purchasing a flat in Seoul. Choosing the adjustment target area shows 13 restricted items. The mortgage carries a lower loan-to-value ratio and an absolute cap, and a large outstanding credit loan can block the purchase altogether. Acquisition tax stays at the standard rate for a first home, but to sell later free of capital gains tax the buyer must live in the home for two years on top of holding it for two. On signing, a funding plan and an occupancy plan must be filed.

The same buyer in an undesignated area faces 0 restrictions. The loan is subject only to the loan-to-value ceiling with no absolute cap, and the exemption needs only two years of ownership. The 9 items with a linked calculator produce figures for undesignated areas too, so running the loan limit and acquisition tax in actual won shows exactly what the difference between the two areas costs.

The most common is thinking designation is only about lending. In fact 13 items across tax and subscription move together. Many buyers sort out the loan and only after completion discover the residence condition that means living in the home for two years.

The second is believing that release undoes everything. The residence condition is fixed at acquisition, so a home bought while the area was designated still carries the two-year residence requirement after release. The third is not checking the order of the designation date and the contract date. Designation usually takes effect the day after it is announced, and transitional rules can keep the old regime for deals where the deposit was paid before designation. Finally, this table is a summary of effects; the actual figures must come from each calculator.