Authorities Will Launch Investigation of Illegal Land Transactions by Foreign Nationals in Korea

The government is launching an extensive investigation to crack down on speculation and illegal land transactions by foreign nationals in Korea. This expands upon the scope of the investigation on speculative housing transactions by foreigners, which was conducted last year. The Ministry of Land, Infrastructure, and Transport of Korea announced that the investigation will be conducted in close cooperation with the Ministry of Justice, National Tax Service, Korea Customs Service, and other related government agencies. It also stated that the subject of the investigation will be 920 cases of suspected speculation among 14,938 land transactions made by foreigners in Korea from 2017 to 2022.

Over the past six years, the volume of domestic land transactions by foreigners has been at a low level of 0.2 to 0.3 percent of total transactions annually, but the rate has steadily been maintained. Of the total transactions by foreigners, 53.5 percent were made within the greater Seoul area. By nationality, Chinese nationals made the most transactions in Korea at 54.9 percent, followed by US nationals at 23.2 percent and Canadian nationals at 6.3 percent.

The ministry explained that abnormal transactions were continuously detected, such as a foreigner purchasing 92 parcels of land, or a transaction made by a three-year-old. It also highlighted a case of a foreigner with the nationality of a tax haven country, such as the British Virgin Islands, purchasing a total of 101 parcels of land. Accordingly, it plans to intensively crack down on illegal acts such as illegal gifting, title trust, illegal importation of overseas funds, etc.

The ministry plans to notify relevant agencies such as the National Tax Service, the Financial Services Commission, and local governments when violations are discovered so that penalties, such as fines, may be imposed. An official from the ministry commented that the investigation will be expanded to include non-housing transactions and dual-purpose buildings used for commercial and residential purposes, and additional investigations will be conducted when abnormal trends in foreign speculation are detected.

It also stated that it is working to make amendments to the Enforcement Decree of Report on Real Estate Transaction to prevent delays in investigations due to lack of information such as unclear residence addresses or residence periods.

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