Gyeonggi-do Detects 406 False Real Estate Transaction Reporters... 37 Referred for Investigation

Gyeonggi Provincial Government

Gyeonggi Province has identified 406 individuals who falsely reported real estate transactions and imposed fines totaling 860 million KRW.

Gyeonggi Province announced on the 20th that from February to July this year, it conducted a special investigation into 2,618 cases suspected of false real estate reporting and planned real estate disguised share transactions, uncovering 406 individuals who falsely reported real estate transactions to evade tax obligations and imposed fines amounting to 860 million KRW. Among them, 37 individuals involved in false transactions, including violations of the Licensed Real Estate Agents Act, were referred for investigation.

For this investigation, Gyeonggi Province classified cases suspected of false reporting such as ▲ up/down contract reporting, false contract date reporting, sales reporting between related parties, inability to verify transaction amounts ▲ false reporting without monetary transactions, transactions suspected of gifts in funding plans ▲ and cases of planned real estate disguised share transactions extracted using Gyeonggi Province’s self-developed ‘Planned Real Estate Continuous Monitoring System.’

As a result of the investigation, 32 cases (33 individuals) involved in setting up mortgages, etc., to evade permits despite actual sales contracts being concluded within land transaction permission zones, and 4 cases (4 individuals) involving violations of the Licensed Real Estate Agents Act such as unqualified brokerage activities and excessive brokerage fees, totaling 36 cases (37 individuals), were referred to investigative agencies for further investigation.

Among the major detected cases, Mr. A entered into a transaction contract for the transfer of actual ownership of forest land in Gapyeong-gun, designated as a land transaction permission zone, with Corporation B, suspected of planned real estate activities. However, it was revealed that mortgages were set up to evade permits, and ownership was transferred after the land transaction permission zone was lifted.

Mr. C reported a real transaction of selling a house in Paju-si to Mr. D for 360 million KRW, but the investigation confirmed that the actual transaction amount was about 150 million KRW, approximately 200 million KRW higher than the real amount, resulting in a total fine of 12 million KRW imposed on both the seller and buyer.

Buyer Mr. E reported purchasing an apartment in Yongin-si for 350 million KRW, but it was confirmed that the buyer’s father paid most of the purchase price, and the case was reported to the relevant tax office for suspected gift tax evasion.

Although no suspicious points were found in the transaction documents, Gyeonggi Province notified the tax authorities of 451 cases where the real estate sellers and buyers were confirmed to be related parties such as family or relatives, or where transactions were reported at unreasonable prices compared to surrounding market prices, requesting tax investigations.

By type, there were 188 cases of related-party transactions, 32 cases of suspicious transaction prices, 60 cases where transaction amounts could not be verified, 10 cases of debt repayment in kind, and 161 other cases suspected of disguised gifts or other issues.

Ko Jung-guk, Director of the Land Information Division of Gyeonggi Province, stated, "We will continue to track suspicious illegal real estate cases in the second half of this year and conduct intensive investigations. We will strive to establish a fair and transparent transaction order by taking administrative actions and referring illegal matters to investigative agencies."

Meanwhile, the ‘Planned Real Estate Continuous Monitoring System’ used in this investigation tracks typical planned real estate transactions that inflate the price of forest land in development-restricted zones, which are practically difficult to develop, to several times the publicly announced land price and sell shares to multiple parties within a short period, by comprehensively analyzing share transactions, land use zones, and transaction frequency based on real estate transaction data.