TAX PROBE OVER FOREIGNERS WITH MULTIPLE HOMES

[Anchor Lead]

For the first time Korea's tax authorities have launched a probe into multiple home owners of foreign nationalities. They have found that some of them dodged taxes while leasing dozens of apartments in Korea and used dubious sources to pay for their real estate purchases.

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Foreign nationals purchased more than 23,000 apartments in South Korea over the past three years. Their combined worth surpassed 7.6 trillion won. In the first half of 2020, when housing prices skyrocketed in the nation, foreigners bought 700 more properties than the previous year. An increase of 400 billion won. The number of foreigners owning two or more homes in Korea now surpasses one thousand.

[Soundbite] (REALTOR(VOICE MODIFIED)) : "They keep buying apartments because real estate prices keep rising. (Monthly rents must have spiked as well.) That's right."

The National Tax Service traced foreigners owning multiple homes in Korea. One U.S. national purchased 42 apartments through the so-called "gap investment" and leased them out. Some of them were not registered as leasing business, meaning proper taxes were not paid. An executive from a foreign firm bought three high-end properties in Seoul and leased them to foreigners without reporting income, and capitalized on the fact that foreign nationals are not eligible for tax breaks on their monthly rent. The rent for the apartments purchased exceeds ten million won. Korea's tax authorities found that one-third of the apartments owned by foreigners, or 7,500 units, had never been inhabited by their owners.

[Soundbite] LIM KWANG-HYUN(NATIONAL TAX SERVICE) : "When foreigners own multiple apartments without residing in them, it's probably for speculation."

The ongoing probe targets 42 foreign nationals. The NTS is determined to find out how they received money to purchase real estate in the country and whether they paid their taxes properly.