National Tax Service Takes Strong Measures Against High-Value Home Buyers... 361 Tax Audits Conducted, 74% in Their 30s

Kim Tae-ho, Director of the Asset Taxation Bureau at the National Tax Service, is briefing on the commencement of tax investigations into 361 suspects of tax evasion in real estate transactions at the National Tax Service Sejong Office press room on the 13th.

[Asia Economy Reporter Kwangho Lee] The government has discovered multiple tax evasion suspicions and launched tax investigations after analyzing high-priced apartment transaction data in major cities that showed localized overheating signs in the second half of last year, as well as tax evasion suspicion data reported through joint investigations by the Ministry of Land, Infrastructure and Transport and local governments. In particular, it will focus on verifying high-priced apartment transactions by individuals in their 30s or younger who are in the early stages of asset formation.

On the 13th, the National Tax Service announced that it will conduct tax investigations on a total of 361 individuals, including 101 high-priced home buyers with unclear sources of funds suspected of evasion such as disguised gifts, 51 high-value jeonse tenants, and 36 small rental corporations and related business corporations suspected of income evasion.

Among the 325 subjects under investigation for sources of funds, 240 are in their 30s, accounting for 74%. This is followed by those in their 40s (33), 20s or younger (33), and 50s or younger (23).

Kim Tae-ho, Director of the Asset Taxation Bureau, explained the background of the tax investigation, saying, "Among the first batch of tax evasion suspicion notifications last year, some unanalyzed data and part of the 670 cases notified on the 4th of this month were analyzed, revealing many transactions with unclear creditor-debtor relationships or unclear sources of funds suspected of disguised gifts and other evasion."

Major cases detected this time include ▲ acquisition of high-priced apartments through disguised remittances of overseas income from the father ▲ disguised gifts using jeonse deposits during real estate transfers ▲ elementary school students acquiring high-priced real estate after reporting only part of the funds as gifts ▲ local residents acquiring high-priced apartments in Seoul through cash gifts ▲ improper outflow of corporate funds to acquire expensive apartments ▲ income splitting and low-rent leasing of real estate through nominee rental corporations.

The National Tax Service plans to continuously and strictly verify tax evasion related to real estate regardless of the real estate market conditions.

A "Task Force (TF) for Responding to Evasive Real Estate Transactions" has been established and operated in the Seoul and Central Regional Tax Offices, where high-priced apartment transactions are frequent, to promptly respond to tax evasion related to real estate transactions in the metropolitan area. There are plans to consider expanding this to the other five regional tax offices (Incheon, Busan, Daegu, Daejeon, Gwangju) depending on real estate market trends.

Additionally, strict investigations will be conducted on tax evasion suspicions such as rental income omission through the use of borrowed-name accounts by multi-homeowners and real estate business corporations established to avoid aggregate taxation. The plan is to thoroughly verify tax evasion through false or excessive expense claims by housing rental business operators.

Furthermore, a solid cooperative system will be established with related agencies such as the Ministry of Land, Infrastructure and Transport and local governments to closely analyze reported tax evasion suspicion data.

Director Kim emphasized, "The National Tax Service will continue to conduct comprehensive analyses of sources of funds related to high-priced home acquisitions and will relentlessly track and tax unearned income evaded through real estate."

This content was produced with the assistance of AI translation services.