From Now On, Buyers of Houses Over 600 Million Won Must Disclose Funding Sources

Existing Speculative Overheated Zones Expanded to Over 300 Million KRW... Adjustment Target Areas Over 300 Million KRW, Non-Regulated Areas Over 600 Million KRW
Gift and Inheritance Funds Must Specify 'From Whom' and 'How Much'
Reasons Must Be Stated for Cash Transactions... Non-Cash Assets Must Also Be Specified

▲ A price list posted at a real estate agency office in Songpa-gu, Seoul / Photo by Jin-Hyung Kang aymsdream@

[Asia Economy Reporter Lee Chun-hee] From now on, all housing transactions exceeding 600 million KRW will require the submission of a fund procurement plan. In cases where payment is made through inheritance, gifts, or funds other than financial assets, the specific source must also be clearly stated.

According to the industry on the 7th, the Ministry of Land, Infrastructure and Transport recently announced the legislative notice for the amendment of the Enforcement Decree and Enforcement Rules of the "Real Estate Transaction Report Act," which includes these details.

With this measure, the submission target for the "Housing Acquisition Fund Procurement and Move-in Plan" will be expanded from the existing transactions of houses worth over 300 million KRW in speculative overheated districts. Going forward, transactions over 300 million KRW in regulated areas and transactions over 600 million KRW in non-regulated areas will also require the submission of the plan. Additionally, when reporting transactions of houses exceeding 900 million KRW in speculative overheated districts, not only the plan but also objective supporting documents must be submitted.

In cases of gifts or inheritance, previously only the amount of the gift or inheritance had to be disclosed, but from now on, it must be clearly specified from whom the gift or inheritance was received and the amount. The same applies to borrowed funds.

Payments made through funds other than financial assets must also be proven in detail. To pay the transaction amount in cash, the reason for paying in cash must be stated in the plan, and if other assets besides cash are used, the specific type must also be clearly indicated.

▲ Form of 'Plan for Procuring Housing Acquisition Funds and Moving-in' included in the amendment to the Enforcement Rules of the 'Act on Reporting Real Estate Transactions, etc.' (Provided by the Ministry of Land, Infrastructure and Transport)

Along with this, when purchasing a house exceeding 900 million KRW in a speculative overheated district, supporting documents must be submitted to prove the contents of the fund procurement plan. The total number of required supporting documents reaches 15 types.

The Ministry of Land, Infrastructure and Transport explained that this amendment is a follow-up measure to the real estate policy announced on December 16 last year. It stated, "This amendment is to implement the housing market stabilization plan announced to establish a transparent and fair transaction order, including the expansion of the submission targets for fund procurement plans." The legislative notice period for the two amendments is 40 days until the 12th of next month. After regulatory review, the amendments are expected to be implemented as early as March.