Recently the land transaction permit system which was introduced to prevent speculative land transactions of land has attracted interest from policy-makers and academics in Korea. This interest raises questions about how to improve the effectiveness of the system. This paper is aimed at suggesting the policy directions for improvement in the permit system.The major policy implications are summarized as follows: Firstly, this study proved that a more clear criterion for designating land transaction permit zones will be needed in the current permit system. Secondly, this study suggests several policy directions for improving the permit system in relation to its operation at local level. Building a more effective land transaction permit system is very important mainly because speculative land transactions of land in development areas are still dominant.