Over 35% of Housing Transactions Above 900 Million KRW Involve Tax Evasion or Loan Violations

[Asia Economy Reporter Yoo In-ho] The government reviewed the actual transaction details of over 1,700 high-priced housing transactions nationwide exceeding 900 million KRW and found that more than 35% involved illicit gift transfers and violations of loan regulations, prompting the National Tax Service and financial authorities to launch investigations.

On the 26th, the Ministry of Land, Infrastructure and Transport, the Financial Supervisory Service, and the National Police Agency announced the results of real estate transaction investigations and criminal investigations at a meeting of related ministers overseeing the real estate market.

The Ministry of Land, Infrastructure and Transport's Real Estate Market Illegal Activities Response Team conducted an investigation into 1,705 suspicious transactions of high-priced homes nationwide exceeding 900 million KRW, reported from December last year to February this year, where the source of funds was unclear or illicit gift transfers were suspected. They uncovered 600 cases (35.2%) of illegal activities such as tax evasion, loan regulation violations, and name-trust fraud, and notified the relevant authorities.

Among these, the National Tax Service will conduct a detailed audit on 555 cases where there were signs of tax evasion through illicit gift transfers involving relatives or misuse of corporate funds.

The National Tax Service will initiate tax investigations on suspects reported for suspected tax evasion whose sources of funds and repayment capabilities are unclear.

There are 37 cases suspected of violating loan regulations by using corporate or business loans for home purchases in ways inconsistent with the original loan purposes.

The financial authorities will verify whether loan regulations were violated in these suspected cases and plan to take measures such as loan recall if it is found that the loan funds were misused for purposes other than intended.

Police investigations are underway for eight cases suspected of name-trust fraud, where real estate transactions were conducted using someone else's name illegally.

Additionally, the Response Team identified 211 cases violating the 'Real Estate Transaction Reporting Act,' such as falsely reporting contract dates, and notified the relevant local governments to impose fines.

Currently, the Response Team is conducting intensive real transaction investigations in overheated metropolitan areas including Songpa, Gangnam, and Yongsan in Seoul, as well as Gwangmyeong and Guri in Gyeonggi Province.

In areas like Songpa, Gangnam, and Yongsan, transactions suspected of evading the land transaction permit system are the main focus of investigations. The Response Team also plans to closely track transactions with unclear sources of funds, such as purchases of homes by teenagers.

The results of criminal investigations directly conducted by the Response Team since its launch in February this year were also disclosed. The team has filed criminal charges in 30 cases (34 individuals), of which 15 cases have been completed and sent to the prosecution. Investigations are ongoing for 395 cases.

Among the 30 charged cases, the most common were 13 cases (11 individuals) involving inducing price collusion through banners or posts on internet cafes, followed by 5 cases (8 individuals) where real estate agents formed groups to refuse joint brokerage with non-members.

There were 9 cases (12 individuals) involving false residence registration or fraudulent winning of special apartment supply, and 3 cases (3 individuals) where non-licensed individuals brokered or advertised real estate.

The Response Team explained that as investigations into fraudulent applications exploiting loopholes in the special apartment supply system continue, the number of suspects could increase to as many as 26.

The Financial Supervisory Service detected cases where some savings banks and credit card companies circumvented LTV regulations by providing loans secured by mortgage-backed loan claims from loan companies. The Financial Supervisory Service plans to issue administrative guidance to apply LTV limits and other loan regulations to mortgage-backed loan claims from savings banks and credit card companies and will conduct thematic inspections on mortgage loan regulations across all financial sectors.

The National Police Agency recently launched a focused crackdown on speculative real estate in Sejong City, where housing prices have been unstable. Eleven special investigation teams comprising 54 personnel have been organized and deployed across eight regional police agencies overseeing regulated areas such as speculative overheating zones and adjustment target areas.

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