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Since this year, Korea's charter guarantee insurance limit has been reduced, causing chaos in the villa market. Multicultural families and foreign residents who want to live in villas on a chartered basis are also expected to face difficulties.
This is because the government has reduced the limit of jeonse guarantee insurance to prevent charter fraud, and the official price, which is the standard for jeonse guarantee insurance, is expected to drop significantly.
In Korea, due to the recent jeonse fraud problem, it has become mandatory for those who want to live on a jeonse to sign up for jeonse guarantee insurance. It's anxious because of being not able to get my jeonse money back unlike before.
How much is the charter guarantee insurance?
Jeonse guarantee insurance is an insurance that guarantees the return of the jeonse deposit. The government has decided to reduce the limit of jeonse guarantee insurance this year. This is because charter fraud, which abused this, increased significantly when charters that were higher than the price of the house were allowed to sign up for guarantee insurance.
For example, in the past, the charter guarantee insurance limit for a villa with a publicly announced price of 100 million won was 150 million won (published price 150%, jeonse tax rate 100%), but in the future, the jeonse tax rate is 90% again at 140% of the publicly announced price, or 140 million won, so that only 126 million won can be guaranteed.
As a result, those who tried to rent a villa on a charter basis were in great trouble because they could not sign up for charter guarantee insurance.
The same goes for those who have previously lived in villas on a chartered basis.
After 2 years, the jeonse guarantee insurance must be renewed. If living in a published price of 100 million won villa with a jeonse deposit of 150 million won, the entire jeonse deposit has been renewed in the past, but in the new standard it exceeds 24 million won so that the deposit is not reduced, insurance renewal will be denied.
Anyway, as more people couldn't sign up for jeonse guarantee insurance, the villa rental market completely has frozen.
This year, the official price is also lower, so the warranty limit is expected to be greatly reduced. You can check changing published price in ‘Public Price Alimee’.
If you live in a villa or are looking for a charter, you must check the publicly announced price of an apartment house this year and figure out in advance how much your guarantee insurance limit is. Also, if you want to renew your charter, you will have to adjust your deposit to match your guarantee insurance.
Now, whether it is an apartment or a villa, if you want to live on a charter basis, it has become a must to check the limit of your guarantee insurance.
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