The purchase-rental housing system originally started with the purpose of promoting housing stability for the common people by directing the housing of those who own multiple homes to the private rental market. Registered businesses were given strong tax benefits, including reductions in acquisition tax, property tax, and comprehensive real estate tax, as well as exclusion from heavy capital gains tax. However, as criticism grows that this system is being abused as a channel for apartment speculation, new registrations for apartments are currently blocked. The problem is that even after the system was abolished, unconventional preferential treatment, such as permanent transfer tax exemption, is maintained for existing businesses with vested rights. This institutional asymmetry has completely eliminated the economic incentive to sell houses, and as a result, it has become a key cause of ‘listing’, where many apartments disappear from the market.

Concrete data clearly proves the harmful effects of this policy. According to an analysis by the National Tax Service, there are approximately 27,000 privately registered rental apartments in the Seoul area that have been canceled due to the expiration of the rental obligation period, of which only 2,000 units appear to have actually been sold through transfer tax reporting, which is a very small portion. The remaining 25,000 households are still sleeping outside the market, tied up in the hands of multiple homeowners. In addition to this, if you include the amount scheduled to be automatically canceled sequentially by 2028, a total of 68,000 housing units in Seoul alone are waiting as a detonator for a supply cliff. This is equivalent to the amount of large-scale urban supply measures promoted by the government, and these are potential assets that can be expected to have a significant supply effect on the market just by fine-tuning the policy.

The reason why rental operators don't sell their homes is very clear. This is because the preferential treatment of not being subject to heavy transfer tax continues even after the rental obligation period ends, and even the long-term holding special deduction can be advantageously applied, making it overwhelmingly advantageous to hold rather than sell. Looking at actual cases, even though an apartment purchased in the past for around 500 million won is currently priced at 1.8 billion won, there are many cases where the sale is postponed due to the tax burden. Rather than simply an individual's investment decision, this suggests that the tax benefits provided by the government are acting as a strong ‘retention incentive’ to suppress the disposal of private property. In the end, the intention of the policy was to provide rental housing for the common people, but the result was a side effect of increased assets for those who own multiple homes and a decrease in market listings.

To overcome this situation, tax authorities and policy decision-makers, including President Lee Jae-myung, are strongly suggesting the need for system reform. The key is ‘fairness’ and ‘step-by-step normalization.’ It is pointed out that if sufficient benefits were enjoyed during the mandatory rental period, it is consistent with market principles to be subject to the same tax environment as regular housing thereafter. However, since a drastic change in the system can have a significant impact on the market, an ‘exit strategy’ of postponing a certain period of time or gradually reducing benefits is being discussed as a realistic alternative. The essence of this discussion is to alleviate the supply shortage problem by providing rental operators with reasonable disposal opportunities and in return releasing locked up quantities into the market.