FOREIGNERS' REAL ESTATE SPECULATIONS

[Anchor Lead]

The government started investigating the formerly undetected problem of foreign nationals’ real estate speculations in Korea. So far, roughly 1,100 transactions are suspected to be speculative.

[Pkg]

In March 2021, a Chinese national in his 30s purchased a penthouse in the Gangnam area for 8.9 billion won. Unlike local citizens who are subject to many loan restrictions, the Chinese buyer reportedly paid the entire amount in loans, causing a “reverse discrimination” dispute. One American citizen bought a total of 45 houses across the country, including homes in the Gyeonggi-do and Incheon areas. There was even a case where an 8-year-old Chinese minor had bought a house. purchase residential properties in Korea every year... the government has decided to conduct a multi-ministry investigations on such seemingly abnormal real estate transactions. Such dealings are suspected of expedient gift, nominal trust, or price-inflating to encourage speculation. Roughly 1,100 out of about 20,000 transactions conducted in the year 2020 and onwards will be subject to investigations. Findings from the first round of investigations will be announced in October. If and when illegalities are confirmed, those cases will be subject to tax audits or imposed fines. Any unlawful act, such as importing illegal funds from abroad, will be notified to the Korea Customs Service and the Ministry of Justice. Also, a separate set of statistics will be kept on foreigners’ house ownership and a law legislated to limit suspicious residential property transactions.

[Soundbite] Lee Gyeong-seok(Ministry of Land, Infrastructure and Transport) : "When the real estate market is overheated or when it is deemed that regulations are needed, we plan to find a way to designate transaction-approved zones for foreigners."

Korea also looks to mandate a non-residential foreigner to submit a funding plan when he or she wants to buy a house in Korea... and to restrict foreigners who committed illegal acts from entering and leaving the country.