840 Suspected Illegal Real Estate Transactions by Foreigners Identified: "Verification of Funding Sources and Rental Eligibility" [Real Estate A to Z]

Stricter Criteria for Identifying Suspicious Transactions by the Ministry of Land

Occupancy Requirement Enforcement in Permit Zones Also to Be Monitored

The Ministry of Land, Infrastructure and Transport announced on September 23 that it had selected 840 suspected cases of illegal real estate transactions by foreigners from among the nationwide reports of residential, non-residential, and land transactions filed between June of last year and July of this year. According to the ministry, a special investigation was launched last month and the results will be released by the end of this year.

This special investigation will utilize information such as proceeds from the sale of stocks, bonds, and cryptocurrencies; overseas financial institution loans; and visa status. The enforcement decree of the Real Estate Transaction Reporting Act was amended in February of this year, allowing the government to collect such additional information. The Ministry explained that by applying newly established criteria for selecting suspected illegal transactions, a greater number of cases were identified than before. There were 605 such cases selected last year.

Authorities will meticulously verify the actual source of funds for these suspected illegal transactions, including foreign-sourced capital. The investigation is reported to be focusing on illegal activities by foreigners in real estate, such as illicit inflow of overseas funds and unlicensed rental operations without a valid visa. Together with local governments including the Seoul Metropolitan Government, the ministry also plans to check whether the occupancy requirements in land transaction permit zones are being fulfilled, in order to effectively prevent speculation.

When purchasing a home in an area designated as a land transaction permit zone, buyers are subject to an occupancy requirement. Failure to comply leads to an enforcement order by the local district office, and further non-compliance results in a compulsory fine. Persistent violations may also result in revocation of the transaction permit.

The planned investigation into foreigners has been ongoing since 2022, following the detection of several notable trends such as the purchase of high-priced homes and bulk purchases of homes using overseas capital. Yoonkeun Shin, Director General for Land Policy at the Ministry, stated, "In order to ensure that speculative buying by foreigners does not undermine the transparent order of real estate transactions in Korea, we will conduct thorough investigations into illegal transactions and respond strictly."

This content was produced with the assistance of AI translation services.