Fined 70 Million Won for Underreporting Transaction Price by 300 Million Won... Seoul Detects 1,573 Real Estate Violations

11,578 Cases of False or Delayed Reports Investigated in the Past Year
1,573 Violations Detected... 6.3 Billion Won in Fines Imposed
Delayed Reporting Most Common with 1,327 Cases

A panoramic view of apartment complexes in downtown Seoul as seen from Namsan, Seoul

#Seller A of a single-family or multi-family house colluded with buyer B to falsely report the transaction price as approximately 300 million won, which is significantly lower than the actual transaction price of about 700 million won. The city detected this false report and imposed an administrative fine of 70 million won each on both A and B.

The Seoul Metropolitan Government announced on August 7 that it investigated 11,578 cases of false or delayed real estate transaction reports over the past year and uncovered 1,573 violations. A total of 6.3 billion won in administrative fines was imposed for these violations.

During a routine investigation of about 8,000 cases in the second half of last year, 956 violations were detected and 2.6 billion won in fines were imposed. In the first half of this year, 617 violations were found among about 3,000 cases investigated, resulting in 3.7 billion won in fines.

The most common type of violation was delayed reporting, with 1,327 cases. When a real estate transaction is completed, the transaction information must be reported to the relevant local government within 30 days of the contract date, but this requirement was not met. This was followed by 222 cases of non-reporting or failure (or false) submission of documents, and 24 cases of false reporting of transaction prices. In one case, seller C and buyer D reported the transaction price of an apartment as 1 billion won, which is higher than the actual transaction price of 700 million won, and each was fined more than 10 million won.

In addition to imposing fines, the city also notified the National Tax Service of 3,662 cases suspected of tax evasion related to capital gains or gift taxes, such as suspected disguised gifts between related parties and transactions involving loans. Cases reported to the National Tax Service as suspected gifts included purchasing an apartment for 800 million won while borrowing 200 million won from a parent, real estate transactions between related parties (such as family members), misappropriation of corporate funds, and suspicious sources of funding that may indicate tax evasion.

The city plans to enhance the functionality of its real estate trend analysis system, improve data management systems, and systematically respond to market-disturbing activities by detecting abnormal transaction signs early through continuous monitoring. In particular, the city will strengthen investigation efficiency and cooperation by improving the method of data linkage and sharing between district offices and the city government.

In addition, since last month, the city has been expanding joint inspections with the Ministry of Land, Infrastructure and Transport, district offices, and the Korea Real Estate Board to crack down on illegal activities that distort the real estate market. For transactions following the June 27 lending regulations, the city is focusing on verifying the authenticity of funding plans, checking for violations of lending rules, and ensuring compliance with the actual residence requirement for land transaction permits.

Cho Namjun, head of the Seoul Urban Space Headquarters, said, "We will strengthen investigations and responses to abnormal transactions in order to enhance transparency in the real estate market and establish a sound transaction order centered on genuine demand."