Gyeonggi Province will conduct a joint special investigation with city and county governments into suspected false real estate transaction reports and illegal brokerage activities until the end of this year.
The investigation targets a total of 1,664 cases from the first half of this year, January to June, including false reporting aimed at tax evasion and ‘up-down contracts’ to increase mortgage loan limits, false transaction reports where high prices are reported and then canceled without monetary transactions to manipulate real estate prices, and suspicious false reports raised through civil complaints or media coverage.
The sources of funds listed in the housing transaction financing plans will also be investigated. Special focus will be placed on minors acquiring homes worth over 300 million KRW, individuals under 30 purchasing high-priced homes exceeding 900 million KRW, and transactions conducted without loans but through other borrowings.
If illegal activities by unlicensed persons or certified real estate agents are detected in transactions reported as direct deals without brokers, they will be reported to investigative authorities for prosecution.
The investigation will begin by collecting relevant explanatory materials from the transaction parties. If the submitted materials are insufficient or not provided, attendance for questioning will be required. Even if materials are submitted, cases with significant discrepancies from market prices or strong suspicions of tax evasion such as capital gains tax or gift tax will be reported to the National Tax Service and the relevant tax office.
Those who submit false explanatory materials or falsely report contracts will face fines up to 30 million KRW. Those who falsely report transaction prices or other details will be fined up to 10% of the actual transaction value and will be subject to tax audits for suspected capital gains or gift tax evasion.
Gyeonggi Province, together with city and county governments, identified 160 violators of real estate transaction reporting regulations through a special investigation in the first half of the year, imposing fines totaling approximately 610 million KRW and requesting tax audits from the National Tax Service for 368 suspicious cases.
Whistleblowers reporting illegal real estate transactions can receive rewards up to 10 million KRW. Eligible reports include false contract reports without monetary transactions or false transaction prices, and can be submitted to the real estate management departments of the city, county, or district where the property is located.
In fact, during the special investigation in the first half of the year, a report accompanied by concrete evidence of a down contract was received by city and county governments. Upon investigation, the down contract was confirmed, resulting in a fine of 260 million KRW imposed on the violator and a reward of 9 million KRW paid to the whistleblower.
Ko Jung-guk, Director of the Land Information Division of Gyeonggi Province, stated, "We plan to focus administrative efforts on investigating illegal real estate transactions to establish a fair and transparent real estate transaction order and realize tax justice," adding, "We also plan to reduce fines for voluntary reporters."
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