"Breaking the Myth of Real Estate Invincibility"... Deputy Prime Minister Hong Declares 'War on Speculation'

The 4th Real Estate Market Inspection Meeting of Relevant Ministers Held

Government Detects Illegal Gift Transfers, Tax Evasion, and Unauthorized Loans
Online Housing Price Collusion and Fraudulent Subscription Subject to Criminal Penalties

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is speaking at the 4th Real Estate Market Inspection Meeting of Related Ministers held at the Government Seoul Office Building on the morning of the 26th.
[Photo by Yonhap News]

[Asia Economy Reporter Lee Chun-hee] The government is launching a large-scale crackdown on real estate purchases made through illicit gifting, tax evasion, and loans used for purposes other than intended. It also announced criminal penalties for online price-fixing and fraudulent subscription practices, aiming to break the myth of invincible real estate. The Ministry of Land, Infrastructure and Transport, National Tax Service, Financial Supervisory Service, Ministry of the Interior and Safety, and even the police have been fully mobilized to declare a war against speculation.

On the 26th, the government held the '4th Real Estate Market Inspection Meeting of Related Ministers' at the Government Seoul Office, chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki. At the meeting, the Ministry of Land, Infrastructure and Transport’s 'Real Estate Actual Transaction Investigation and Illegal Activity Investigation Results' and the National Police Agency’s 'Special Crackdown Status on Real Estate Market Disruptive Activities' were discussed, and the Financial Supervisory Service’s prohibition on circumventing housing mortgage loan regulations through loan sharks was finalized.

Deputy Prime Minister Hong said, "From December last year to February this year, among high-priced housing transactions nationwide over 900 million KRW, 1,705 suspicious transactions were investigated, and a total of 811 suspected violations of laws were identified." Specifically, there were 555 suspected cases of illicit gifting and tax evasion, 37 suspected violations of loan regulations such as misuse of loans, 8 suspected cases of name-trust agreements, and 211 suspected violations of the 'Real Estate Transaction Reporting Act' such as false contract date reporting.

The Ministry of Land, Infrastructure and Transport plans to notify the relevant authorities such as the National Tax Service, Financial Services Commission, and local governments of the suspected illegal cases for follow-up actions.

"Said to Buy Medical Devices"... Purchased Ultra-High-End Apartment with Business Loan

Infographic on Suspected Cases of Misuse of Personal Business Loans (Source: Ministry of Land, Infrastructure and Transport)

The government also disclosed various illegal cases on this day. According to the Ministry of Land, Infrastructure and Transport, individual business owner Mr. D borrowed 2.6 billion KRW in a personal business loan from a savings bank, citing the purchase of medical devices as the reason. However, the money was actually used to purchase a 7 billion KRW apartment located in Gangnam-gu.

Cases of illicit gifting were also uncovered. Representative A of Corporation ㄱ paid 750 million KRW in corporate dividend income to B (30), a child and shareholder. B used this to purchase a 1.35 billion KRW apartment in Songpa-gu, Seoul. However, B’s shareholding in Corporation ㄱ is only 0.03%. The Ministry of Land, Infrastructure and Transport plans to notify the National Tax Service, considering this as illicit gifting.

Additionally, the response team announced that so far, 30 cases (34 people) have been criminally charged through investigations into real estate market crimes. Among them, 13 cases (11 people) involved price manipulation activities. Posting messages on internet cafes such as "Do not list properties below a certain price" was considered interference with the work of nearby real estate agents.

What’s So Special About 'Lotto Subscription'... Falsified Residency in Goshiwon and Name Lending by Disabled Persons

There were also 9 cases (12 people) of fraudulent apartment subscription through falsified residency or improper use of special supply systems. According to the Ministry of Land, Infrastructure and Transport, Mr. G paid a certain amount to a goshiwon (small lodging house) owner in another area to falsify residency and succeeded in subscribing to an apartment in that area. It has been confirmed that five others besides Mr. G won subscriptions through similar acts.

A case of abuse of the special supply system by a disabled persons’ organization leader was also uncovered. Mr. C, the leader of a disabled persons’ organization, asked disabled persons and national merit recipients he knew to lend their names in exchange for money. Later, in collusion with brokers, he won special apartment supply rights and resold the rights to gain price differences. The Ministry of Land, Infrastructure and Transport is currently investigating Mr. C, the brokers, and five accomplices, as well as the name lenders.

Each agency will soon begin investigations into the detected cases. The National Tax Service will start tax audits on suspects of tax evasion, while the Financial Services Commission, Ministry of the Interior and Safety, and Financial Supervisory Service will verify violations of loan regulations and take measures such as loan recovery if misuse is confirmed.

At the meeting, the police also disclosed interim results of the 'Special Crackdown on Real Estate Market Disruptive Activities,' which has been ongoing for 100 days from the 7th of this month until November. According to the police, a total of 823 people have been cracked down on so far, with 34 prosecuted and sent to the prosecution. The remaining 789 are still under investigation. By crackdown type, 526 were for disrupting transaction order, the largest group, followed by 142 for corruption in reconstruction and redevelopment associations.

Deputy Prime Minister Hong said, "The government’s policy will to stabilize the real estate market by protecting genuine demand and eradicating speculative demand is very firm," adding, "This time, we are determined to break the deeply rooted myth of invincible real estate and will steadfastly pursue real estate policies without wavering."

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