Buying an Apartment... 'Gosiwon False Residence Registration' and 'Insurance Money Illicit Gift' Included

A Man in His 30s Who Borrowed 3 Billion Won Entirely from His Father to Buy an Apartment
Bought Apartment Using Disabled and Merit Holder's Names to Win Subscription
Learned from YouTube and Even Faked Residence in a Gosiwon

[Asia Economy Reporter Moon Jiwon] A person in their 20s, Mr. A, claimed that he procured about 900 million KRW from the cancellation of a savings-type insurance contract when purchasing an apartment worth 1.8 billion KRW. Investigation revealed that Mr. A made lump-sum insurance payments of 800 million KRW in December 2010 and 300 million KRW in December 2012. The issue is that Mr. A was a minor at the time of the insurance payments. The Ministry of Land, Infrastructure and Transport (MOLIT) viewed that Mr. A had received the insurance money as an illicit gift from his parents to purchase the apartment, reported this to the National Tax Service, and confirmed tax evasion suspicions.

The MOLIT's 'Real Estate Market Illegal Activities Response Team' announced on the 16th that it had identified 190 suspected legal violations during a planned investigation of real estate transactions over about five months since June, targeting land transaction permission zones in Seoul's Gangnam, Songpa, and Yongsan districts, as well as Gwangmyeong, Guri, and Gimpo cities in Gyeonggi Province, and Paldal District in Suwon.

According to MOLIT, Mr. B, a person in his 40s engaged in retail business, used 200 million KRW out of a 300 million KRW loan obtained from a bank for small and medium-sized enterprise working capital to purchase an apartment worth 800 million KRW. Using a business loan for apartment purchase is illegal. MOLIT plans to notify the Financial Services Commission and the Financial Supervisory Service to verify the loan regulation violations and ensure future measures such as loan recovery are taken.

In the case of Mr. C, in his 30s, he borrowed the entire purchase price from his father to buy an apartment worth 3 billion KRW. MOLIT suspects illicit gifting due to the excessive purchase amount and will report this to the National Tax Service to monitor whether Mr. C is appropriately paying his father the statutory interest rate (4.6%) on the loan.

MOLIT also reported that a total of 47 cases (61 people) were criminally charged through real estate market crime investigations. Among these, 27 cases (27 people) with completed investigations were sent to the prosecution. Reviewing major cases, Mr. D, who serves as the head of a disabled persons' organization, approached a total of 13 people including disabled persons and national merit recipients whom he knew, borrowed their names, won special apartment supply allocations, and then realized resale profits.

Mr. D and others paid 7 million KRW per case to disabled persons and national merit recipients in 2017 to borrow their names and won allocations for 14 apartments in the metropolitan area. The apartments were resold with premiums up to 100 million KRW, earning about 400 million KRW in profits. The investigation led to the arrest of Mr. D and brokers, and seven related individuals were sent to the prosecution. The response team plans to summon the 13 disabled persons and national merit recipients who lent their names for questioning.

Cases of fraudulent subscription through disguised residence registration at goshiwons (small lodging houses) were also uncovered. The investigation found that 12 people, including suspect Mr. E, paid certain fees to goshiwon owners in other regions despite having no intention to actually reside there, registered their residence at the goshiwons, and won allocations for 11 apartments in those areas. They learned the method of the crime through a real estate instructor's YouTube channel and offline lectures.

The response team charged 12 fraudulent subscribers including the real estate instructor, and five of them with completed investigations were sent to the prosecution. Investigations into the remaining seven are ongoing.

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