Disclosure of Source of Funds Investigation Results for Housing Transactions Over 900 Million Won

Continuous Monitoring of Major Development Sites in Supply Measures
Immediate Planning Investigation in Case of Overheating Concerns
No Disagreement on 'Public Participation High-Density Reconstruction' Despite Government-Seoul City Discord

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is speaking at the 1st Real Estate Market Inspection Meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 5th. Photo by Moon Ho-nam munonam@

[Sejong=Asia Economy Reporter Joo Sang-don] The government announced that, following the 'Housing Supply Expansion Plan' centered on the Seoul metropolitan area, it will strengthen investigations into the sources of funds for buyers of high-priced homes over 900 million KRW and regularly disclose the results. Additionally, it will continuously monitor major development sites under the supply measures and immediately initiate planning investigations if overheating concerns arise.

On the 5th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, chaired the '1st Real Estate Market Inspection Meeting of Related Ministers' at the Government Seoul Office and stated, "We will conduct continuous investigations into suspicious transactions involving funds for purchasing homes over 900 million KRW and regularly announce the results."

The government has already been continuously investigating actual transactions of homes priced over 900 million KRW nationwide through the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Board since February this year. Additionally, starting in September, when reporting housing transactions in speculative overheated districts, regardless of the transaction amount, supporting documents for each item in the funding plan must be submitted. Until now, these results were not disclosed, but starting this month, suspicious transactions will be regularly announced. Attendees at the meeting included Deputy Prime Minister Hong, Minister of Land, Infrastructure and Transport Kim Hyun-mi, Financial Services Commission Chairman Eun Sung-soo, Blue House Economic Secretary Lee Ho-seung, National Tax Service Commissioner Kim Hyun-joon, and National Police Agency Commissioner Kim Chang-ryong, sending a strong message to the market.

This stern warning from the government appears to be a response to concerns about rising housing prices in some areas following the housing supply announcement. However, with the median price of apartments in Seoul exceeding 900 million KRW, there are criticisms that the government is excessively monitoring the market.

Investigations into the sources of funds will focus on major development sites under the supply plan and nearby areas. Deputy Prime Minister Hong said, "We will continuously monitor these areas and immediately start planning investigations if overheating concerns arise," emphasizing, "Through cooperation among related agencies, we will strengthen investigations, prosecutions, and crackdowns on price collusion, fraudulent subscription, and tax evasion, and thoroughly investigate and strictly punish all suspected cases of irregular and illegal transactions without exception." The Ministry of Land, Infrastructure and Transport, National Tax Service, and police will jointly strengthen investigations into price collusion and fraudulent subscriptions, and increase tax audits when suspicious cases of real estate transaction tax evasion are identified.

Deputy Prime Minister Hong reaffirmed the government's determination to proceed with the 'Public Participation High-Density Reconstruction' despite discord with Seoul City. He said, "The public participation high-density reconstruction plan announced yesterday was prepared after extensive discussions among the Ministry of Economy and Finance, the Ministry of Land, Infrastructure and Transport, and Seoul City," adding, "The government will make every effort to proceed smoothly with the public high-density reconstruction project as planned through cooperation with Seoul City and communication with reconstruction associations." Furthermore, to minimize potential discord during the future implementation process, the government decided to accelerate the discovery of leading cases. To this end, a new type of public participation high-density reconstruction will be established, and the Urban Maintenance Act will be revised to diversify public participation methods.

The government emphasized, "In particular, Seoul City has also agreed to work together to achieve visible results." This is interpreted as an active effort to resolve discord after Seoul City stated, "The city has never lifted the 35-floor restriction," following the government's announcement the previous day to introduce public participation high-density reconstruction in Seoul and relax the floor limit to 50 floors.