Controversy Continues Over Relaxation of Landlord Loan Regulations Amid Reverse Tax Crisis

As one of the government’s countermeasures for the reverse tax crisis, controversy continues over the ‘relaxation of landlord loan regulations’, which was announced to be implemented next month. There is a difference between the perspective of ‘turning off the lights urgently’ for tenants in crisis who cannot get back the jeonse deposit, and the perspective of ‘saving gap speculation’ for those who bought a house using only the deposit without considering their ability to repay. For the time being, tenants can get their deposit back, but in that the next tenant will become a “subordinated tenant” pushed back by the bank’s mortgage, there is also an evaluation that the government is putting off the crisis it is facing and raising it further. According to government officials on the 13th, the government is considering easing the DSR regulation only for the purpose of returning the jeonse deposit. Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho said at a discussion meeting invited by the Kwanhun Club on the 8th, “(Deregulation) will be implemented at the latest in July.” Inside and outside the government, a proposal to ease DSR regulations and allow loans to be equal to the difference between the existing deposit and the new deposit is strongly discussed. The most interesting part of the market is ‘which’ lessor will be subject to deregulation. The government has been saying that indiscreet ‘investment in the gap without capital’ can be subject to criminal punishment for charter fraud. As such, there is room for criticism of’policy mismatch’ if loan regulations are eased for all lessors whose new deposit is less than the previous deposit. Previously, Minister of Land, Infrastructure and Transport Won Hee-ryong met with reporters during an on-site inspection of rest facilities at a construction site in Guro-gu, Seoul on the 8th and said, “On the premise that we cannot tolerate the result of indiscriminately increasing household loans and the result of gap investors becoming victors due to the deregulation of loans. There is,” but in reality, there are many prospects that it will not be easy to distinguish between a ‘good faith lessor’ and a ‘gap investor’. There are also concerns that the deregulation of landlord loans could prevent natural market adjustments. In particular, in the case of multi-housing landlords, if it is difficult to repay the deposit, it is natural to dispose of some of the houses they own to raise repayment funds. . Chae Sang-wook, CEO of Connected Grounds, an expert in the real estate market, said, “I agree with the direction of easing the lessor’s loan regulations, but the important thing is ‘details’.” It can be a form of releasing money and supporting it,” he said. The ‘next tenant’ is also a problem. Current tenants can get their deposit back thanks to the easing of landlord loan regulations, but the next tenant will be subordinated to the financial company that gave the loan, and if the jeonse price drops further at the end of the contract period, they may suffer a loss of deposit. Or, there is a possibility that the effectiveness of the countermeasure itself will be lowered due to the small number of tenants willing to sign a global contract for a house with a mortgage. Kim Kyu-gyu, director of Korea Investment & Securities’ Asset Succession Research Institute, said, “For example, in the case of retired seniors renting, there would be a particularly high demand for DSR deregulation because there is no income, but in this case, the ability to repay loans may not be sufficient.” Even if it is turned off, it is necessary to minimize concerns about insolvency of bonds from financial institutions and non-repayment of deposits by new tenants by placing short-term repayment as a condition or carefully examining the ability to repay.” Reporter Ha-Yan Choi chy@hani.co.kr