All of Seoul, 7 Districts in Incheon, and 23 Cities and Counties in Gyeonggi Province Now Require Prior Permission
Layered Regulations: Mandatory Residency and Approval
Proof of Funding Required; Overseas Authorities Notified of Illegal Funds
As concerns grew over a potential increase in speculative transactions by foreigners through overseas borrowing, especially in connection with the June 27 lending regulations, the government has taken preemptive measures to block such activity. Going forward, foreigners will be required to obtain prior approval to buy or sell residential properties throughout all districts of Seoul, as well as in 23 cities and counties in Gyeonggi Province-including Seongnam, Goyang, and Suwon-and in 7 autonomous districts of Incheon. Additionally, foreigners must submit documentation such as a funding plan and proof of actual residency, and are obligated to reside in the property for two years after acquisition. The government also plans to strengthen investigations into speculative transactions.
Lee Sangkyung, Vice Minister of Land, Infrastructure and Transport, announcing the plan to designate additional "Restricted Areas for Foreigners' Land Transactions." Ministry of Land, Infrastructure and Transport.
On August 21, the Ministry of Land, Infrastructure and Transport announced a plan to designate additional "Foreigners' Land Transaction Permission Zones" reflecting these measures. The scope of these zones has been significantly expanded from previously covering only territorial waters and the five West Sea islands. This move comes in response to a rapid increase in housing transactions by foreigners since 2022, particularly concentrated in the Seoul metropolitan area. Since August 2023, there has been a continuous rise in purchases of domestic housing by non-resident foreigners for non-residential purposes, as well as numerous cases of suspected speculative transactions involving high-priced properties with unclear sources of funds.
All of Seoul and 23 Cities and Counties in Gyeonggi Province Designated as Permission Zones
The newly designated land transaction permission zones encompass the Seoul metropolitan area, including all districts of Seoul. In Gyeonggi Province, 23 cities and counties are included, excluding Yangju, Icheon, Uijeongbu, Dongducheon, Yangpyeong, Yeoju, Gapyeong, and Yeoncheon. In Incheon, 7 autonomous districts are covered, excluding Dong-gu, Ganghwa-gun, and Ongjin-gun. The designation will be in effect for one year and may be extended depending on real estate market conditions.
The definition of "foreigner" includes individuals without Korean nationality, foreign corporations, and foreign governments. These parties must obtain approval from the relevant city, county, or district office to carry out residential property transactions within the designated zones. The properties subject to these regulations include single-family homes, multi-family homes, apartments, row houses, and multiplex housing.
Furthermore, foreigners acquiring residential property within these zones will be required to reside in the property for two years. The Ministry of Land, Infrastructure and Transport will rigorously monitor compliance with this residency requirement through on-site inspections, and will impose enforcement fines or revoke transaction approvals for violations.
Blocking Inflows of Overseas Funds... Expanded Requirement for Submission of Funding Plans
In addition, the government plans to expand the mandatory submission of funding plans and supporting documents to more effectively prevent speculative housing investments by foreigners using overseas funds. Previously, this requirement applied only to transactions within speculative zones, but it will now extend to all transactions subject to approval within the designated land transaction permission zones.
The funding plan must specify the type of visa, details of overseas loans and remittances, and the names of foreign financial institutions involved. Based on this information, the government will strengthen planned investigations into illegal transactions. In particular, if there are suspicions of money laundering or tax evasion, the authorities will cooperate with the Financial Intelligence Unit and the National Tax Service to share relevant information with overseas tax authorities.
Lee Sangkyung, Vice Minister of Land, Infrastructure and Transport, stated, "Through these measures, we will do our utmost to block speculative housing transactions by foreigners using overseas funds, continuously monitor transaction trends, and take all necessary actions as needed."
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