Exclusive: South Korea moves to tighten rules on foreign real estate ownership

Real estate bill targets foreign buyers, calls for reciprocal rules

Illustrated by Chosun Design Lab Jung Da-woon

A new bill aimed at tightening regulations on foreign property ownership in South Korea is set to be introduced, proposing a shift from the current reporting-based system to a permit-based approval process for foreigners acquiring real estate. The legislation would also require the government to publicly disclose whether foreign nationals face similar restrictions in their own countries when purchasing property abroad.

Rep. Kim Eun-hye of the People Power Party is expected to submit the amendment to the Act on Report on Real Estate Transactions on July 2. According to a draft obtained by The Chosunilbo, the proposal would mandate that foreign nationals obtain prior approval from a designated authority before acquiring or holding property in South Korea. Under existing law, foreigners are only required to report such acquisitions within 60 days of signing a contract, or within six months in the case of purchases through court auctions.

A view of apartment complexes in Songpa-gu as seen from the Seoul Sky Observatory in Songpa-gu, Seoul. /News1

The bill notes that while countries such as China impose strict limitations on real estate transactions by foreigners, Chinese nationals face few obstacles when buying or selling property in South Korea, including apartments. Lawmakers say this imbalance violates the principle of reciprocity. In China, for example, foreigners are prohibited from purchasing land, and must reside in the country for at least one year before becoming eligible to buy a home.

Due to lax restrictions and soaring home prices, South Korea has emerged as a prime investment destination for foreign buyers. According to the Ministry of Land, Infrastructure and Transport, the number of housing units owned by foreigners surpassed 100,000 for the first time as of the end of December last year, reaching 100,216 units—a 9.6% increase from a year earlier. Chinese nationals accounted for the largest share at 56.2%, followed by U.S. nationals at 22%, and Canadians at 6.3%. One in four foreign-owned homes is located in Seoul. In contrast to Korean citizens, foreigners are largely exempt from regulations on multiple-home ownership and tighter lending criteria. The number of foreign nationals owning two or more homes rose by 10.2% over the past year.

The proposed amendment would also require the Minister of Land, Infrastructure and Transport to conduct at least one annual review to determine whether reciprocity is being observed in real estate transactions involving foreign nationals. The findings would be made public and would include any cases in which South Korean nationals are placed at a disadvantage when attempting to acquire property abroad.

“While the government has imposed strict lending rules on Korean citizens, foreign nationals can obtain financing through institutions in their home countries and purchase property in South Korea without significant restrictions,” Kim said. “The current framework—intended to curb speculation—has instead made it more difficult for locals to purchase homes, while enabling speculative foreign capital to acquire domestic real estate. This bill is intended to correct that imbalance.”

A separate amendment to the Act on Report on Real Estate Transactions—calling for mandatory reciprocity and a permit-based land purchase system for foreign nationals—has also been submitted to the National Assembly.

On June 11, Seoul Mayor Oh Se-hoon said during a regular city council session that foreign ownership has contributed in part to the abnormal surge in housing prices. He added that the city intends to strengthen its review of funding sources to improve transparency in real estate transactions involving foreign buyers.