Mass Detection of Suspicious Speculative Transactions Including Home Purchases with Corporate Loans and 'Mom-Chance'

Ministry of Land, 106 Cases Detected in Q1... Notified Related Agencies Including National Tax Service

Photo by Asia Economy

On the 11th, the Ministry of Land, Infrastructure and Transport announced that it detected 106 suspicious speculative transactions after analyzing real estate transaction reports, focusing on areas showing unusual trends in the first quarter.

The Ministry has been continuously monitoring transaction reports to establish a fair real estate transaction order, while also selecting areas with unusual overheating or concentrated speculative demand each quarter to conduct focused investigations on transactions suspected of illegality.

Accordingly, in the first quarter of 2022, five areas were selected where unusual trends such as rapid real estate price increases, concentration of record-high price transactions, sharp rise in transaction volume, and rapid increase in transactions by non-residents, corporations, and minors were detected: Gangnam-gu in Seoul, Bupyeong-gu in Incheon, Gangneung-si in Gangwon-do, Masanhappo-gu in Changwon-si, Gyeongnam, and Namwon-si in Jeonbuk.

Among the 3,822 housing transactions in these five areas, 470 cases (12.3%) of abnormal transactions such as excessive high or low price transactions and unclear sources of funds were selected for focused investigation.

As a result, 106 cases (22.5%) of suspicious speculative transactions such as illicit loans and down payment contracts were detected. The related agencies, including the National Tax Service, Financial Services Commission, and local governments, which received the notifications, will conduct tax evasion and loan analyses, and if suspicion is confirmed, will take measures such as collecting evaded taxes, recovering loans, and imposing fines.

Looking at major detected cases, there was a suspected misuse of a corporate facility fund loan (2.52 billion KRW) obtained from the secondary financial sector to purchase a single-family house (Gangnam, Seoul) in a regulated area for 3.6 billion KRW.

There was a suspected down payment contract case where a multi-family house (Bupyeong, Incheon) was directly purchased for 150 million KRW but falsely reported as 125 million KRW, and a suspected illicit gift case where a person in their 30s purchased an apartment (Gangneung, Gangwon) for 250 million KRW with the entire transaction amount provided by their mother.

Kwon Hyuk-jin, Director of the Housing and Land Office at the Ministry of Land, Infrastructure and Transport, said, "We will strictly manage illegal real estate transactions to establish a fair and transparent real estate market order and protect actual demanders," adding, "We plan to continue analyzing housing transaction details quarterly, selecting areas with unusual trends, and conducting ongoing speculative investigations."