[Beginner's Guide to Investing] "Is it over once you secure the money?"... Now you must also prepare supporting documents for the funding plan

[Asia Economy Reporter Chunhee Lee] When you become a real estate reporter, you sometimes get unexpected KakaoTalk messages from friends. "How do I apply for a housing subscription?" "What does first priority mean?" For the 2030 'Burin-i (Real Estate + Beginner)' who only have subscription savings accounts created by their parents when they were young, I am going to create a guide.

Burin-i A, who has struggled to gather money to buy a home under the Seoul sky. However, it is not just about gathering money; they heard that they must submit a 'fund sourcing plan' and even 'supporting documents' proving where the money came from, which caused them to worry. Today, we will learn about the fund sourcing plan for those Burin-i who wonder if they really need to do this even though they are buying a house with their own money ('Naedonnaesan').

Which areas and houses does this apply to? ... All houses in regulated areas, over 600 million KRW in non-regulated areas

The fund sourcing plan and supporting documents are not new topics. Previously, if you purchased a house over 300 million KRW in regulated areas or over 600 million KRW in non-regulated areas, you had to submit a fund sourcing plan, and if you bought a house over 900 million KRW in a speculative overheated district, you had to submit supporting documents.

However, the new 'Real Estate Transaction Reporting Act' enforcement decree, which took effect on the 27th of last month, significantly expanded the requirement to submit fund sourcing plans to all houses within regulated areas. Along with this, the requirement to submit supporting documents was extended to all houses within speculative overheated districts. These measures do not apply if the contract was signed before the 26th of last month.

Currently, speculative overheated districts include all of Seoul and 48 designated areas such as Gwacheon, Gwangmyeong, Hanam, Seongnam, Suwon, Anyang, Guri, Gunpo, Uiwang, Bundang and Sujeong districts of Seongnam, Danwon district of Ansan, Suji and Giheung districts of Yongin, Dongtan 2 in Hwaseong, Yeonsu, Namdong, Seo districts of Incheon, Dong, Jung, Seo, Yuseong districts of Daejeon, Suseong district of Daegu, Sejong, and others. Adjustment target areas include 69 places excluding Suseong district of Daegu among speculative overheated districts, plus Goyang and Namyangju in Gyeonggi, Jung, Dong, Michuhol districts of Incheon, Daedeok district of Daejeon, Cheongju in Chungbuk, and others. If you plan to purchase a house in these areas, you should prepare thoroughly regarding the source of funds in advance.

The fund sourcing plan and supporting documents should be submitted together when a licensed real estate agent reports the actual transaction price. In other words, they must be prepared and submitted within 30 days from the contract date. If you are concerned about personal information exposure, you can also submit them yourself. The same applies to direct transactions without a real estate agent.

If the submission deadline is missed, a fine of up to 5 million KRW will be imposed, and if false reporting occurs, a fine of up to 30 million KRW will be imposed. However, in the case of winning a housing subscription, failure to submit or incorrect submission of the fund sourcing plan does not cancel the winning.

How much supporting documentation should be prepared?

Within speculative overheated districts, you must prepare not only the fund sourcing plan but also all related supporting documents carefully. You may need to submit up to 15 types of supporting documents.

If the funds were sourced through loans from banks or other financial institutions, you must prepare all related documents such as financial transaction confirmation, debt certificates, and loan application forms. You must also specify whether the loan is a mortgage, a personal loan, or other types.

Funds you originally had cannot be overlooked either. For bank deposits, you need a deposit balance certificate; for proceeds from stock or bond sales, stock transaction statements or balance certificates; for cash, documents proving income; and for proceeds from selling other real estate, real estate sales or lease contracts must be attached.

Parental support is the same. If the money was received as a gift or inheritance, you must carefully state in the fund sourcing plan from whom and how much was gifted, and submit documents proving payment of gift or inheritance tax. If it is a loan rather than a gift or inheritance, you must detail in the 'Other Borrowings' section of 'Borrowed Funds' from whom and how much was borrowed, and submit not only the loan agreement but also documents showing how much of the loan has been repaid.

Do I have to submit all supporting documents? ... Can be replaced with a 'Non-submission Reason Statement'

View of Seoul apartments from the 63 Building observatory./Photo by Hyunmin Kim kimhyun81@

Unlike the fund sourcing plan, preparing supporting documents can sometimes be troublesome. For example, if you are buying a house now but plan to move in two years later and intend to rent it out in the meantime, including the deposit as part of the house purchase funds, or if you are 'trading up' but your current house has not yet sold, you may not have documents to prove the related funds. It is also difficult if the loan has not yet been executed.

In such cases, you can substitute the documents with a 'Non-submission Reason Statement.' For example, if you plan to rent out the house first, you can enter the expected rental deposit amount in the rental deposit section and submit the non-submission reason statement. Even if the rental deposit amount changes later, as long as it is within a reasonable range consistent with the law’s purpose of detecting suspicious fund sourcing, it should not be a major problem according to industry explanations.

Similarly, if you have not yet received a loan, you can submit the non-submission reason statement along with loan consultation documents and application forms. For subscription interim payment loans, since the loan has not yet been made, you can write it under 'Other Loans,' state the schedule for receiving the interim payment loan, and submit the non-submission reason statement together.

However, even if you submit the non-submission reason statement and pass the report, the reporting authority may later request supporting documents, so always keep related documents carefully as a precaution.

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