The Ministry of Agriculture, Food and Rural Affairs (Minister Chung Hwang-keun, MAFRA) improved the regulations in the guidelines of the project to provide loans for rural housing improvement, so that from 2023 owners of one home can apply for the loan as long as the improvement is for vacant houses*. The Ministry announced that local governments are receiving applications for the project throughout the year. *Vacant houses registered at the MAFRA’s Rural Areas Information Service (RAISE). ※ Those interested can apply for the loan at community service centers in eup or myeon referring to the public notice section on the website of relevant city/county/district.
The Rural Housing Improvement Project provides loans at low interest rates when improving or newly constructing rural houses in order to make the residential environment better in rural areas. According to the Building Act, loans are available for housing improvement and construction of a new house which require a notification of building construction. The limit of the loan for improvement is up to 100 million won, and that of new construction loan is up to 200 million won. The interest rate of 2%, which is quite low, is applied to the loan and the repayment period is up to 20 years. ※ One can also choose a variable interest, and the total floor area of the house (including annexed buildings) must be 150㎡ or less.
However, the actual loan amount may vary depending on the loan regulations of the lending institution (NongHyup) within the limit, so it is necessary to consult with the lending institution before applying for the loan. In addition, benefits such as a reduction of up to 2.8 million won in acquisition tax and a 30% reduction in cadastral survey fees are provided when rural housing is improved or newly built through this project.
Low-cost houses worth 300 million won or less in non-greater Seoul are excluded from the number of houses when calculating comprehensive real estate tax and transfer tax with the revision of related laws in 2022. Therefore, even if an empty house in rural areas (in the case of low-cost housing in the non-greater Seoul area) is acquired as a vacation home, it is unlikely that there will be any additional tax burden such as comprehensive real estate tax and transfer tax.
MAFRA expanded loan eligibility from non-homeowners to those with one home only in the case of improving vacant houses, in an attempt to proactively meet the demand of urban citizens who wish to have a summer house in rural areas and to resolve the issue of increasing empty houses in rural areas.
Director Ha Kyung-hee of the Rural Planning Division of MAFRA said, “Through this regulatory improvement, it is expected that urban residents who are interested in vacation homes in rural areas will be able to do so more easily by making the most of the Rural Housing Improvement Project. It is hoped that it will be a win-win solution for both urban and rural residents with less empty houses and better living environment in rural areas, leading to the increase in the number of people in rural areas.”