190 Suspected Cases of Real Estate 'Tax Evasion and Loan Violations' Confirmed in Seoul Metropolitan Area Including Gangnam and Yongsan

Real Estate Market Illegal Activity Response Team Investigates for 5 Months
Numerous Illegal Cases in High-Value Housing Areas like Gangnam and Yongsan
47 Cases (61 People) Criminally Charged through Investigation... 2 Arrested

On the 19th, when the government announced its 24th real estate policy, posters criticizing the government's real estate policy and listing information were posted at a real estate agency in Songpa-gu, Seoul. Photo by Moon Honam munonam@

[Asia Economy Reporter Moon Jiwon] The Ministry of Land, Infrastructure and Transport announced on the 16th that a total of 190 suspected violation cases were identified, including 109 suspected tax evasion cases and 76 suspected violations of transaction reporting laws, following a planned investigation into actual housing transactions targeting Seoul’s Gangnam, Songpa, Yongsan districts and major areas in Gyeonggi Province. The Ministry plans to notify relevant agencies to enable follow-up actions such as tax audits and loan recoveries.

The 'Real Estate Market Illegal Activity Response Team,' formed by the Ministry in February, announced the results of the planned investigation into actual transactions conducted over about five months since June. The investigation targeted land transaction permit zones in Seoul’s Gangnam, Songpa, and Yongsan districts and their surrounding areas, as well as Gwangmyeong, Guri, Gimpo cities in Gyeonggi Province, and Paldal District in Suwon.

The Response Team selected and investigated 577 suspicious transactions (322 in Gangnam and Songpa, 74 in Yongsan, 181 in the metropolitan area) and confirmed 109 suspected tax evasion cases such as illicit transfers among relatives, 3 suspected loan regulation violations involving loans intended for SME working capital being used for home purchases, 76 suspected violations of the Real Estate Transaction Reporting Act, and 2 suspected false entries in registration causes.

(Data from the Ministry of Land, Infrastructure and Transport)

Among a total of 3,128 housing transactions in the Gangnam, Songpa, and Yongsan areas investigated, 94 cases (3.0%) were suspected of tax evasion such as illicit transfers. This is significantly higher than the 0.34% tax evasion suspicion rate (15 cases out of 4,464 transactions) in Gwangmyeong, Guri, Gimpo cities and Paldal District in Suwon. The Ministry explained, "This suggests that suspicious illegal activities such as illicit transfers were relatively more frequent in Seoul’s major urban areas where high-priced housing is concentrated."

The Response Team will notify the National Tax Service of suspected tax evasion cases to ensure follow-up actions such as tax audits, and notify the Financial Services Commission and the Financial Supervisory Service of suspected loan regulation violations to verify compliance and recover loans.

Additionally, suspected violations of the Real Estate Transaction Reporting Act will be reported to local governments to impose fines, and suspected false entries in registration causes will be referred to the police for investigation.

Furthermore, since its launch, the Response Team has criminally charged a total of 47 cases (61 individuals) through real estate market crime investigations, and 27 cases (27 individuals) with completed investigations have been sent to the prosecution. In this process, two main perpetrators of fraudulent subscription cases using special supply for the disabled and national merit recipients were arrested, and seven key suspects were sent to the prosecution.

(Data from the Ministry of Land, Infrastructure and Transport)

Looking at the 47 criminally charged cases by type, the most common were 17 cases (20 individuals) involving illicit apartment wins through false residence registration or improper use of the special supply system. This was followed by 12 cases (24 individuals) where certain licensed real estate agents formed groups to refuse joint brokerage with non-member agents, 14 cases (12 individuals) involving price collusion inducement through banners or internet cafe posts, and 4 cases (5 individuals) where non-licensed persons brokered or advertised real estate.

Since the Response Team’s launch, the Real Estate Transaction Disorder Reporting Center (hereafter Reporting Center) established at the Korea Real Estate Board has been receiving about 200 reports per month on average. Reports of price collusion from February to August were concentrated in the metropolitan area (about 78%), but since September, metropolitan area reports have decreased to about 44%, while reports have significantly increased centered on Busan, Daegu, Ulsan, and Gyeongnam. The Ministry analyzed that this reflects "a growing public interest in illegal activities in the real estate market."

Kim Susang, Director of Land Policy at the Ministry of Land, Infrastructure and Transport and head of the Real Estate Market Illegal Activity Response Team, emphasized, "As illegal methods in the real estate market diversify and the geographic scope expands beyond the metropolitan area to nationwide, we will carefully monitor real estate market trends across the country and respond promptly to any abnormal signs."

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