○ Public opinion evenly split on land transaction permission system in Gyeonggi Province
– Most potent measure available for real estate market stabilization versus excessive infringement upon fundamental rights
– Gyeonggi Province thoroughly and carefully examining the issue
○ Gov. Lee Jae-myung seeks relevant opinions through social networking services

Gyeonggi Province Governor Lee Jae-myung is seeking relevant collective opinions amid evenly divided views over the proposed land transaction permission system, which Gyeonggi Province is considering as measure by which to mitigate real estate speculation and stabilize housing prices.

According to provincial authorities on August 12, Gyeonggi Province is considering the implementation of a land transaction permission system to avert real estate speculation, allowing only the purchase of homes for the purpose of actual residence. If this system is implemented, permission must be obtained from the city, county, or district office having jurisdiction over the real estate in question before a contract can be signed, and even if the permission is obtained, the buyers must undertake immediate occupation of the home as well as a minimum residence period of two years.

However, the provincial government is also cautious about the issue as opinion on the feasibility and effectiveness of the land transaction permission system is divided. The government plans to make a final decision about the introduction of the system after closely examining it from various perspectives.

Proponents claim that it is the most potent measure available to stabilize the real estate market. They argue that public regulations on land transactions should be reinforced with public interest as the top priority so as to correct skewed and uncontrolled land ownership, prevent unreasonable land prices driven by speculation, and control unfair, unearned income.

The Constitutional Court of Korea previously determined that the land transaction permission system is a form of restriction, not a denial of private property, and that the restriction on disposal to curb speculative land transactions is inevitable as it is not an critical infringement of property rights. Proponents predict that the system will have a substantive effect on restraining speculation as it had a considerable effect on curbing prevalent real estate speculation in the 1970s and 1980s; it is predicted to reduce gap investment since only actual residents will purchase housing.

In particular, some anticipate that the land transaction permission system will help prevent property speculation in Gyeonggi Province and restore market stability if it is implemented for foreign nationals and corporations only.

On the other hand, those who oppose the land transaction permission system claim that it is an excessive violation of fundamental rights. They see the land transaction permission system being considered by Gyeonggi Province as virtual “housing transaction permission,” and claim that unlike land—which is a limited resource—houses are buildings, and thus, there is no justification or basis for government control.

Some argue that the system not only violates the Constitution of the Republic of Korea by restricting freedom of residence and relocation, an inherent infringement upon the right to dispose land which is private property, but that it is also tantamount to communism or socialism.

There are also concerns that the implementation of the land transaction permission system in Gyeonggi Province will fuel anticipatory purchases and demand, and that the balloon effect will increase speculative demand outside of Gyeonggi Province in places such as Seoul.

Accordingly, Governor Lee posted a message on his SNS channels titled “Land Transaction Permission: We seek for your opinion,” asking provincial residents to share their opinions on the issue.

“There is a clear divide between the pros and cons over the land transaction system that is currently being considered by Gyeonggi Province,” Governor Lee said after explaining both sides of the issue. “I seek the opinions of our residents, who are the sovereigns.”

Governor Lee added, “Please share any creative ideas or thoughts regarding the land transaction permission system. Through the power of collective intelligence, we will shape our real estate policy in Gyeonggi Province.”