Long-Term State Property Lease (Gukyujanggi)

A practical term referring to the system and contractual relationship under which state-owned property is leased or permitted for use over the long term.

Long-Term State Property Lease (Gukyujanggi)

Overview

Gukyujanggi (國有長期) is a practical term denoting the system by which state-owned property is leased to, or permitted for use by, individuals, corporations, and public institutions over the long term, as well as the contractual relationships arising from it. Because the disposal of state property—such as sale or exchange—is in principle strictly restricted, demand from the private sector for its use is met not through transfer of ownership but through "long-term use permission" and "lending." Long-term state property leases therefore function as a key concept for understanding state property management policy and projects utilizing public land.

Key Details

Concept and Scope

State-owned property is classified by use into administrative property, preservation property, and general property. Long-term use is mainly arranged for general property, and even administrative property may exceptionally be permitted for use to the extent that it does not impede its original purpose. Use permission is a contractual right granting only the power to possess and use, whereas lending is a more stable contractual relationship in which the construction of permanent structures is permitted and the requirements are stricter.

Legal Basis

The State Property Act and its Enforcement Decree serve as the basic grounds. Use permission is governed around Article 20 of the Act, and lending around Article 30, while the period, rates, and procedures are set in detail by the Enforcement Decree and by Ministry of Economy and Finance directives and established rules. Property managed by local governments is subject to the Public Property and Commodity Management Act, so that even the same "long-term use" differs in governing statute and administering entity.

Contract Period and Renewal

Long-term use permissions and lending contracts are typically concluded in units of several years, and renewal or extension is possible when certain requirements are met. Lending for the construction of permanent structures or for public-interest projects often qualifies for longer periods. Contracts specify the purpose of use, the period, the usage fee, the duty to restore the property to its original state, and the conditions for termination in case of violation; use for purposes other than the stated one or unauthorized subleasing constitutes grounds for termination.

Calculation of Usage Fees

Usage fees and lending fees are calculated by multiplying the value of the relevant property by a set rate. Generally, the lending rate is set higher than the use permission rate, and reductions or exemptions may apply for public-interest projects, social welfare purposes, and the like. Because rates and reduction requirements are frequently adjusted through amended directives, it is essential to confirm the latest standards before contracting.

Management and Restrictions

A long-term state property lease is not a disposal but a grant of use authority, so ownership remains with the state. Accordingly, the contracting party may not make unauthorized changes to the land category, transfer rights, or use the property for purposes other than the stated one, and bears the duty to restore the property to its original state upon termination of the contract. The state inspects usage through regular surveys and the state property management system.

Recent Trends

In 2024–2025, demand for long-term lending is increasing in projects for renewable energy (solar power), public housing, and logistics facilities utilizing idle state land. Through the Comprehensive State Property Plan, the government is expanding private-sector access to idle and underutilized property while strengthening the clearing of unauthorized occupation and digital-based contract management. In addition, legislative discussions continue on aligning the rates and procedures for public property and state property, so businesses considering long-term contracts need to continuously monitor amendments to statutes and changes in announced rates.