Foreigners entangled in hundreds of ‘illegal property transactions’

Korea’s real estate authorities identified 272 cases of suspected illegal property transactions by foreigners in the country.

Apartment buildings in Seoul seen from the 63 Building in western Seoul on Thursday. [YONHAP]

Korea’s real estate authorities have identified 272 cases of suspected illegal property transactions by foreigners.

The Ministry of Land, Infrastructure and Transport on Thursday announced the findings of its five-month investigation, in which the ministry discovered 127 suspected illegal transactions involving houses and 145 cases involving studio apartments — also known as officetels in Korea — conducted by foreign nationals.

The investigation covered 7,005 house transactions involving foreign nationals from June 2022 to May this year, and 7,530 officetel transactions from January 2018 to June this year.

The ministry has identified 272 cases, encompassing 423 suspected violations. Among these, Chinese nationals were involved in 226 cases, or 53.4 percent of the total, with Americans in 63 and Filipino nationals in 23.

The illegal activities largely took place in the greater Seoul area, with Seoul accounting for 35.4 percent, Gyeonggi 27.6 percent and Incheon 18.9 percent.

The latest findings follow the previous four-month investigation into illegal house transactions involving foreigners that began in June and the five-month investigation on land transactions in February.

There were 36 cases of suspected illegal importation of currency, such as avoiding the declaration of cash worth over $10,000 to the customs authorities or fraudulent foreign currency exchange.

Moreover, 17 cases of violating visa regulations by running property rental businesses without proper qualifications were found.

Other cases involve gift tax evasion, misuse of loan funds and the false declaration of property value.

In one case, a Seoul-based couple with foreign nationality acquired a 3 billion won ($2.3 million) apartment they have been living in with a 1.5 billion won lump-sum deposit contract, or jeonse in Korean.

The couple insisted the funds came from their existing jeonse deposit and 1.5 billion won in savings, but the savings are suspected to be from outside of Korea without customs declaration.

The couple’s case has been referred to the customs authorities. If found guilty, the suspects may face a jail sentence of one year or less, or a fine of up to 100 million won.

Other suspected cases were also referred to related government branches, including the Ministry of Justice, National Tax Service and Financial Services Commission.

The government has been focusing on curbing speculative housing transactions by foreigners with new rules, including allowing the authorities to set specific qualifications for granting land transaction permits, including recipient qualifications and intended land use.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]