Announcement of Special Investigation on Foreigners' Housing Speculation
High-priced Housing Purchases to Evade Loan and Tax Regulations
Multiple Cases Detected Including Hwanchigi, Unreported Transactions, and Bitcoin
Foreigners' 'K-Real Estate' shopping was concentrated in Seoul and Gyeonggi Province. The nationality of foreigners who purchased the most domestic real estate was Chinese.
According to the government's announcement on the 28th regarding the 'Foreigners' Housing Speculation Special Investigation,' an analysis of 567 suspected illegal activities detected by nationality showed that Chinese accounted for 314 cases (55.4%), the highest number. Next were Americans with 104 cases (18.3%) and Canadians with 35 cases (6.2%).
Looking at the regions of purchase, Gyeonggi Province had the highest number of suspected illegal activities with 185 cases (32.6%). Seoul followed with 171 cases (30.2%), and Incheon with 65 cases (11.5%). Suspected illegal activities detected in the metropolitan area totaled 421 cases, accounting for 74.2% of the total.
In Seoul, examining by autonomous districts, foreigners' 'Gangnam love' was also confirmed. According to ownership transfer registration (sale) application data from the Court Registry Information Plaza, foreigners purchased 707 cases of collective buildings (apartments and other multi-family housing) in Gangnam over the past five years (2017-2021). This far exceeds the Seoul-wide average of 471 cases. Seocho-gu had 540 cases, and Songpa-gu had 523 cases, both above the average.
The Ministry of Land, Infrastructure and Transport (MOLIT) plans to notify related agencies such as the Ministry of Justice, Korea Customs Service, National Police Agency, and National Tax Service about the foreigners detected this time to ensure investigations and fines are carried out.
Based on the results of this special investigation of actual transactions, MOLIT has prepared measures to block foreign real estate speculation in consultation with related ministries. First, a permanent cooperation system will be established with the Korea Customs Service regarding the crackdown on the inflow of overseas funds. Abnormal transaction data selected through analysis of foreigners' housing financing plans will be shared with the Customs Service semiannually.
The Real Estate Transaction Reporting Act will be amended to require submission of a foreigner registration certificate and designation of a trustee manager when reporting real estate transactions. This is to prevent investigation gaps for foreigners who leave the country after purchasing real estate.
To enhance tax enforcement effectiveness, MOLIT will promote sharing of foreign household composition data held by the Ministry of Justice and Ministry of Health and Welfare (National Health Insurance Service) with tax authorities through the 'Foreign Real Estate Related Agencies Council.' Verification of foreigners' household members' residence and occupancy status will also be strengthened. A new foreigner housing ownership statistics system will be established to actively respond to speculative transactions. A statistical production service linking building registration data and actual transaction data will be conducted, with a pilot production scheduled for December.
A legal amendment is also being pursued to allow city and provincial governors to designate areas suspected of foreign speculation as 'transaction permission zones' to restrict transactions.
Additionally, a legal amendment is underway to clearly specify visa types eligible for rental business registration, such as Overseas Koreans (F4), Permanent Residents (F5), and Marriage Immigrants (F6).
Furthermore, plans are in place to expand special investigations if abnormal trends are detected not only in speculative land transactions such as large-scale land purchases by foreigners, share splitting, and abnormal high or low price purchases but also in non-residential transactions like officetels.
Won Hee-ryong, Minister of Land, Infrastructure and Transport, stated, "In order to establish a fair trading order and protect domestic real demanders, we will continue to promote institutional improvements to identify the status of foreign real estate, which has been a blind spot, and to eradicate speculation."
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