When viewing places in South Korea, the last thing you should presume is expansive accommodation. Korea is one of the most densely populated countries in the world and with more than 50 million residents, every available square foot is valuable.
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The advantage of such a competitive housing market is that one does not take time to find a place to live in South Korea. Those who move for short-term rentals for the first time in the country can move into long-term housing within a month of arriving here.
However, when different types of accommodation are available, the options are limited. Most ex-pats live in small studios or apartments with more than one room. If you are looking for a rented house or apartment that can fit your entire family, know that acquiring a large space is considered a luxury, and homes are mostly reserved for the rich and privileged.
The best option for obtaining a larger location is prioritizing suburban areas over the more popular city centers.
Considering buying a house a step further in South Korea? Nevertheless, the buying process for locals is not more complicated than before, so if you have enough savings, then investing in property can be a viable option.
House or apartment rent
There is some good and bad news for those thinking about renting an apartment in South Korea. The good news is that the rental market is very fast and, once you land, you can find a place here in a week or two.
South Korean rental prices are also not expensive, especially when compared to some European and North American countries, but ex-pats moving to Seoul should expect to pay the most. The bad news is that most of the apartments are very small, as they can be used for most ex-pats.
Hiring as a foreigner in South Korea
One of the most foreign problems when trying to find a place in Korea is that everything is in Korean, including the most popular apps and websites for rent. If you do not know the language you may struggle to get anything good and if you do, then you will have trouble contacting or negotiating with your potential landlord.
Another problem that is very common in South Korea is misleading advertising. It is not uncommon in an advertisement to look completely different than an apartment.
Also, advertisements can be completely fake, designed to entice a potential tenant. This is why it is highly advisable to hire a real estate agent who can communicate for you and find you exactly what you are looking for.
Types of accommodation in Korea
- Apartments – These are more luxurious in Korea. The apartments here have tall buildings with buildings-14 buildings. The height and number of buildings in small towns may vary, but in general, they are owned by a company that has its brand. The apartments themselves are often large, with more than one room. This is one of the pricier options available.
- Officers – As the name suggests, these are a combination of an office and a hotel. These types of places are small and popular among people who live on their own and allow tenants to register their business at the address.
They are studio-type rentals with all the necessary things in one room. These are affordable options, especially for those living in big cities.
- Villa – Although it may look like a big fancy house, there are also villa apartment buildings. These are usually located away from the center and are less than six stories. Typically, villas are individually owned, so your landlord may live next door.
The dwellings in these buildings are more elaborate, with no elevators, and fewer residents. Associated with other options, homes are normally cheaper in terms of both rent and services.
- Houses – Single-story houses are very rare and expensive in South Korea. However, they are available to be away from big cities. If you want to rent a house while enjoying the items offered by the local metropolis, you will have to pay a substantial amount for both your deposit and the monthly rent.
Rental Procedure and Rules
The real estate market in South Korea wants to hold you on your toes. When visiting the apartment scene, you need to be quick and decisive. Your real estate agent can only give you a few minutes to decide that the place you are visiting is suitable for you.
The opposite is that the rental process here is very fast. You must have documents signed and ready within a week or two of choosing the location.
For the same reason, you should not start looking for a place long ago – a month in advance when you want to move is usually more than enough.
Property-related taxes depend on various factors. If the property is inherited in South Korea, inheritance tax will have to be paid in addition to other taxes. The tax on the property is divided into three categories based on when and why it is levied:
- Tax-related to purchase.
- Taxes related to possession.
- Transfer-related tax.
- Purchase-related taxes mainly include acquisition taxes and possibly a special tax for rural areas.
After purchasing a property, taxes related to the possession of personal property or multiple property holdings must be paid annually. Property tax must be paid on each property. General property tax is paid only if the total value of all the owner’s property in South Korea exceeds KRW by 600 million, or KRW exceeds 900 million if the property is owned by a family.
Transfer-related taxes are the Korean equivalent of funds increases rates. Individuals pay transfer-income tax on their property based on the balance between the purchase price and the selling price. Corporations pay transfer-related taxes through their corporation tax.
The most common types of apartments are for sale in Korea. Their price may depend on:
- Age of the building;
- Brand name of the building;
- Proximity to public transport;
- Which side windows are facing;
Home buying process and steps in South Korea
When it comes to buying potential property, doing in South Korea is not much different than in any other country. Establishing a budget and your requirements, hiring a real estate agent, and discussing your potential options are all part of the initial process.
Once you find the location to suit your needs and budget, you can begin the official process of purchasing the property.
As in any Korean, you should follow the Real Estate Registration Act, describing the process of property registration. The Act is a rule book that you need to follow that states property ownership, rent, mortgage, and more.
Property Purchase Requirements: Resident Expense
As a foreign resident, you are subject to the Foreign Land Acquisition Act. With this act, you have to inform the government about the property purchase within 60 days of the finalization of the contract.
To do this, you must present a certified copy of your property purchase contract and property registration to your city, county, or district office.
After paying the full price for the property you purchased, you must transfer the ownership of the immovable property to the name of the previous owner. That too should be done within 60 days. To complete the transfer, you must keep the following documents:
- Certified copy of your ARC;
- Property listing application with certificates proving the reasons for registration;
- Registration certificate with a certified copy.
- If you purchase property in protected areas, you will also need to obtain specific permission for them.
Property Purchase Requirements: Non-Expense Expense
In the above two acts, non-resident foreigners are also required to follow the Foreign Exchange Act. The reason for this is that non-residents are investing foreign money that they have earned abroad in South Korea.
This is why apart from informing a local government office about the purchase, it is also necessary for non-residents to report the transaction to the Foreign Exchange Bank. For this you need:
- A copy of the property contract;
- Certified copy of property registration;
An official property valuation report
They must also prove that their official address is registered abroad.
After paying the full price, you will have to transfer the ownership registration of the building to your name. To do this, you need:
- Proof of Address
- Verifying reasons for registration
Registration certificate with a certified copy
To complete the registration, you will also have to apply for the registration number. This can be done through an immigration office by presenting a copy of your land acquisition report and your passport.