Probe into Legality of Direct Home Sales Finds... 4 in 10 Suspicious Deals in Gangnam's Three Districts

Land Ministry launches targeted probe into suspected illegal direct deals and first-quarter transactions

The government uncovered numerous home sales suspected of being illegal in direct transactions conducted without real estate agents. About two-thirds of all cases uncovered were in Seoul, and more than 60% of those in the capital were concentrated in the three Gangnam districts of Gangnam, Seocho and Songpa.

The Ministry of Land, Infrastructure and Transport announced the findings on October 29 from a targeted investigation into direct home transactions reported nationwide over the year from March 2025 to March 2026. Using an AI screening system, it identified 741 suspicious transactions among those reported during the period. A closer review identified 351 transactions suspected of involving legal violations. Because some transactions involved violations of multiple laws, the ministry identified a total of 424 suspected violations.

The ministry said it would notify the relevant agencies of each suspected violation. Of the 351 suspected transactions, 224, or 64%, were uncovered in Seoul. In particular, 140 were found in the three Gangnam districts, accounting for 40% of all cases uncovered.

In one case, the head of a corporation, identified as A, used the company’s name to directly purchase a commercial-residential building in Seoul owned by his mother for KRW 5.57 billion. Of the purchase funds, A’s company borrowed KRW 700 million from another company that he heads and KRW 425 million from a company headed by his younger sibling. The ministry deemed the loans from related parties excessive and said it would notify the National Tax Service.

A villa neighborhood in downtown Seoul, seen from Namsan. June 27, 2025. Photo by Yoon Dongju.

Another suspected case involved a company that directly purchased its representative’s home for KRW 645 million, using part of a KRW 930 million loan obtained for corporate operating funds. The ministry deemed the transaction unrelated to the company’s business and concluded that the funds had been used for a purpose other than that for which they were borrowed. It plans to notify the Ministry of the Interior and Safety. In another case, a person who owned four homes sold three to a younger sibling and bought them back seven months later. Between the sale and repurchase, the person sold an apartment in Gyeonggi Province to someone else. Suspecting a nominee ownership arrangement intended to qualify for the capital gains tax exemption available to single-home households, the ministry said it would ask the police to investigate.

The ministry also screened and investigated 845 suspicious transactions among apartment sales reported across Seoul and Gyeonggi Province in the first quarter of 2026. It uncovered 327 transactions suspected of involving legal violations, including illicit gifts and false reporting, involving 361 suspected violations, and plans to notify the relevant agencies of each. “Going forward, we will actively pursue targeted investigations not only into brokered transactions but also direct transactions, and respond firmly to illegal deals to establish sound order in real estate transactions,” said Kim Young-guk, head of the ministry’s Housing and Land Office.

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