Landlord who bought the house on the basis of jeonse, does not receive transfer tax benefits even if the contract is renewed within 5%

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Win-win rental system Q&A
Current – Same as the lessor who signed the previous contract, the previous contract period must be over 18 months
Sign a win-win contract and sell after 2 years… Two-year residence permit, transfer tax exemption

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On the 22nd, inquiries from the National Tax Service and the real estate community were flooded with inquiries about the plan to expand the win-win rental system, which is the key to the Yoon Seok-yeol administration’s first real estate countermeasures, ‘June 21 Real Estate Countermeasures’, raising questions between landlords and tenants.

It is pointed out that the effect of suppressing the cheonsei price will not be large because the application requirements are complicated, which increases confusion, and there are not many applicable subjects that meet the requirements.

The win-win rental system was first introduced in December last year as a system that exempts the real residence requirement for non-taxation of transfer tax (two years) to the landlord who raised the monthly rent to less than 5% compared to the previous contract. Previously, the target of benefits was limited to houses with a published price of 900 million won or less, but in this measure, the standard for house prices has been removed and all houses are covered. Multi-homeowners will also be able to receive benefits if they plan to become a single-homeowner after disposing of an existing house. The win-win rental system, which is easy to get confused, is summarized in a Q&A.

―The exact concept of a win-win tenant is… .

“In the case of a new/renewed lease contract, it refers to the lessor who has signed a contract (a win-win contract) with the rent less than 5% of the previous contract. Even if the rent remains the same or lowered, it can become a win-win tenant.”

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―The standard of ‘previous contract’ is… .

“Only contracts that have been maintained for at least one year and six months are considered as previous contracts. In order to become a win-win tenant, you must not move out the tenant or renew the contract before the previous lease period has reached one year and six months.”

―In May 2021, you bought a house with Jeonse and inherited the contracted Jeonse in August 2020. If the lease contract expires in August of this year, which is two years, if the jeonse deposit is raised to within 5% and the contract is renewed, will it become a win-win contract?

“Can not be done. The lessor of the previous contract and the win-win contract must be the same person. The Jeonse contract inherited when buying a house is not considered as the previous contract because it was made by the previous landlord.

The landlord in the question said ① after renewing the global contract in August of this year ② maintaining this contract for at least one year and six months to meet the ‘immediate contract’ requirement ③ raising the deposit within 5% when making the second global contract after February 2024 ④ The second contract must be maintained for at least two years to be exempt from transfer tax.”

-Mr. A, the lessor, bought an apartment with a mortgage loan in March 2021. After that, if I immediately find a tenant for jeonse and raise the deposit to less than 5% in March 2023, can it be recognized as a win-win contract?

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“Yes. If it is not a Jeonse succession, but the lessor A directly signed a jeonse contract, it is recognized as the previous contract, so it is a win-win contract.”

– The apartment was sold. What if I pay the jeonse right away at the time of move-in?

“There is no previous contract for a new condominium. A win-win contract cannot be immediately recognized. After signing the jeonse contract at the time of moving in, if you renew the contract at least 1 year and 6 months later and raise the jeonse deposit to 5% or less, then it can be recognized as a win-win contract.”

―If I sell the house immediately after signing a win-win contract, can I get recognition for a two-year residence?

“Can not be done. In order to receive benefits, you have to sell after signing a win-win contract and maintaining a two-year contract.”

―How long do I have to sign a contract to receive the benefits of a win-win rental?

“This system applies to contracts signed between December 20, 2021 and December 31, 2024. Even if the lease contract expires on December 31, 2024, only the contract needs to be completed within the deadline.”

―After signing a win-win contract once before December 31, 2024, the next contract will exceed 5% and the contract will be raised to the market price. Can I get a transfer tax exemption if I sell this house?

“It is possible. It only needs to be recognized as a win-win contract once.”

– Multi-family dwelling House A enters into a win-win contract by renting out house, and house B lives. If I leave house B and sell house A, can I get a transfer tax exemption on house A?

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“not. House B must be sold first. As the name of the system suggests, the one-family, one-household transfer tax exemption is available when a single householder sells the house.”

―You are a third-homeowner who owns houses A, B, and C. Houses A and B have a win-win contract and live in house C. Can I get benefits when I leave house C and sell houses A and B?

“Can not be done. You can receive benefits only when you last sell a house under a win-win contract. There is no benefit when selling 2 units. If the last remaining house is a house with a win-win contract, the transfer tax is exempted if the house is sold.”

Correspondent Dongsoo Choi firefly@donga.com

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