"Foreign Real Estate Acquisition Management Act"
Stricter Requirements Including New Permit System for Foreign Transactions
The People Power Party announced on July 31 that it will push forward with the so-called "Foreign Real Estate Acquisition Management Act," which aims to strengthen the requirements for foreigners to acquire real estate in Korea, as a party-sponsored bill in August.
Kwon Youngjin, a member of the People Power Party and head of the party's Real Estate Market Stabilization Response Task Force (TF), stated in a press release on this day, "While the government's June 27 loan regulations are blocking opportunities for young people and ordinary citizens to own homes, there have been repeated concerns that foreigners are still able to purchase real estate without any barriers, leaving many citizens feeling frustrated."
On the 20th, a citizen is enjoying the view of Seoul, densely packed with apartments, from the Namsan Observatory in Seoul. Photo by Yonhap News
Kwon pointed out, "As of the end of last year, the number of homes owned by foreigners had already surpassed 100,000, with a significant portion concentrated in Seoul and the greater metropolitan area. The bigger issue is that speculative purchases by foreigners are stimulating market prices and disrupting transaction order."
He continued, "If this continues, Korean citizens will be plagued by concerns about housing, while foreigners will reap speculative profits from prime locations, leading to a distorted structure in which so-called 'golden land' is monopolized by non-citizens." He emphasized, "Real estate is not just a simple asset, but an issue directly linked to national territory, security, and the housing rights of the people."
According to the People Power Party, the United States withholds 10% of the sale price from buyers when foreigners sell real estate in the country. In addition, Canada prohibits foreigners from purchasing homes in major cities and densely populated areas until 2027, and Australia requires foreigners to obtain approval from the Foreign Investment Review Board before acquiring residential real estate.
The proposed bill is expected to include the establishment of a system to manage information on foreign real estate purchases and transactions; the introduction of a permit system for foreign real estate transactions; special management of land transactions near national infrastructure or security-related facilities; and obligations such as a requirement for actual residence for foreigners acquiring real estate.
Kwon added, "We will prepare institutional improvements to rationally regulate and manage indiscriminate real estate purchases by foreigners, eliminate reverse discrimination, stabilize the housing market, and protect the housing rights of our citizens."
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