Gyeonggi-do Conducts Full Audit on Real Estate Auction Acquisition Tax Omissions... 1.3 Billion KRW Reclaimed

Gyeonggi Provincial Government

Gyeonggi Province announced on the 20th that it conducted a "Comprehensive Investigation of Tax Evasion in Auctioned Real Estate Acquisitions" in the first half of this year, uncovering 225 cases of omitted acquisition tax base reporting and collecting a total of 1.3 billion KRW in additional taxes.

According to the Local Tax Act, taxpayers must report acquisition tax based on the actual acquisition price when acquiring real estate or other assets for consideration. The acquisition price includes not only the simple purchase price but also costs related to handling collateral and amounts for assuming existing tenants' security deposits. However, in cases where real estate with a lien or leasehold right is acquired through auction, many cases report acquisition tax based solely on the winning bid amount, resulting in tax omissions.

Accordingly, from May to August, Gyeonggi Province conducted a comprehensive investigation by comparing real estate auction information sites with acquisition tax data, targeting auctioned properties where leasehold rights and liens were reported. As a result, among 1,552 transactions with differences between the appraised value and the winning bid amount, 225 cases of acquisition tax omissions were detected, and a total of 1.3 billion KRW was collected.

This investigation was carried out by Gyeonggi Province selecting the investigation targets first, then each city and county thoroughly examined auction acquisition-related materials such as lien reports, auctioned property specifications related to tenant security deposits, court lease relationship investigation reports, and judgments based on acquisition tax filing details.

By type of detected cases, there were 199 cases of omitted reporting of senior priority tenant rights (700 million KRW) and 26 cases of omitted reporting of lien resolution costs (600 million KRW), among others.

No Seung-ho, Director of the Tax Justice Division of Gyeonggi Province, stated, "Through continuous monitoring of related cases and thorough tax investigations, we will establish a sound transaction order in the real estate market and realize fair taxation."