Inspection of Abnormal Housing and Land Transactions in the Seoul Metropolitan Area from the 13th to the End of the Year
Gangnam 3 Districts, 'Mayongseong' Inspection → 1st Generation New Towns → Gyeonggi and Incheon in Order
#. Homebuyer Mr. A transferred the final payment to seller Mr. B, purchasing the house for a total of 1 billion KRW. They are siblings. Afterwards, Mr. B sent 200 million KRW back to Mr. A. As a result, due to the discrepancy between the reported housing transaction amount (1 billion KRW) and the actual transaction amount (800 million KRW), false reporting of the transaction price (under-the-table contract) was suspected and reported to the local government.
On the 13th, the Ministry of Land, Infrastructure and Transport announced that from the 13th until the end of this year, it will conduct on-site inspections and planned investigations of abnormal housing and land transactions in the metropolitan area in cooperation with related ministries and local governments. This is due to the increased possibility of market-disturbing activities such as price collusion and inflated contracts between related parties as apartment prices have recently risen mainly in Seoul and the metropolitan area. Additionally, following the '8.8 Supply Plan' announced last week, which includes creating new housing sites by releasing Greenbelt areas, inspections will also cover abnormal transactions of forest land and surrounding areas.
This inspection was prepared to block illegal and unfair acts that disrupt the order of real estate transactions, in accordance with the 'Plan to Expand Housing Supply for National Housing Stability' announced on the 8th.
The government will operate five on-site inspection teams in three phases until the end of the year. First, from the 13th, inspections will be conducted in the three Gangnam districts of Seoul (Gangnam, Seocho, Songpa) and the 'Mayongseong (Mapo, Yongsan, Seongdong)' area. Next, the first-generation new towns and the entire Seoul area will be checked. Finally, investigations will cover Gyeonggi, Incheon, and areas with concentrated abnormal transactions.
The on-site inspection teams are jointly composed of the Ministry of Land, Infrastructure and Transport, the Financial Services Commission, the National Tax Service, the Financial Supervisory Service, local governments, the Korea Real Estate Board, and the Housing and Urban Guarantee Corporation (HUG).
Separately from the joint inspections, the Ministry of Land, Infrastructure and Transport will conduct a full survey of reported housing transactions in the metropolitan area this year and carry out detailed investigations of suspicious illegal transactions in three phases. The main inspection targets are ▲ suspicious transactions involving price inflation such as cancellation after reported transactions or long-term unregistered properties ▲ multiple suspicious purchases within a short period ▲ suspicious transactions such as disguised gifts.
To block speculative demand for new housing sites, a detailed planned investigation will also be conducted on abnormal land transactions in Seoul's development-restricted zones and adjacent areas until the announcement of new housing sites. This targets transactions suspected of compensation speculation such as ▲ corporate purchases ▲ out-of-area buyers ▲ multiple purchases by the same buyer within a short period.
According to the 'Real Estate Transaction Reporting Act,' the Ministry of Land, Infrastructure and Transport collects explanatory materials from transaction parties and analyzes them. If signs of illegal activity are found, actual transaction investigations will be conducted. Depending on the violation, notifications will be sent to the National Tax Service, Financial Services Commission, Ministry of the Interior and Safety, and local governments, and investigations will be requested from the National Police Agency.
Based on the investigation results, the National Tax Service will analyze the source of funds for suspected tax evasion cases and initiate tax audits if disguised gift tax evasion is confirmed. The Financial Services Commission and Ministry of the Interior and Safety will conduct financial institution inspections for violations of loan regulations. They will verify compliance and, if unauthorized use of loan funds is confirmed, plan to recover the loans. Additionally, the relevant local governments will impose administrative penalties such as fines if illegal acts like false reporting or false price reporting are revealed.
Meanwhile, the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Board monitored approximately 930,000 housing transaction reports last year. Among these, if illegal activities were suspected in abnormal transactions, direct actual transaction investigations were conducted or inspections were carried out in cooperation with local governments.
From May 2022 until the end of last year, the Ministry of Land, Infrastructure and Transport detected 3,456 cases of abnormal real estate transactions out of 7,275 investigated. The detected cases were forwarded to the National Tax Service, relevant local governments, the Financial Services Commission, Ministry of the Interior and Safety, and the National Police Agency.
Kim Gyu-cheol, Director of the Housing and Land Office at the Ministry of Land, Infrastructure and Transport, said, "We will make every effort to stabilize the real estate market together with related ministries and local governments, with national housing stability as a core task."
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