If You Buy Land Over 500 Million Won, Proof of Funds Is Mandatory... 1 Billion Won Reward for Reporting Disruptive Acts

Announcement of 'Measures to Eradicate Real Estate Speculation and Prevent Recurrence'
Mandatory Proof of Funds for Land Transactions Over 1000㎡
Accelerating Launch of Real Estate Transaction Analysis Institute... Empowering Authority

Prime Minister Chung Sye-kyun is announcing the results of the Anti-Corruption Policy Council on the 29th at the Government Seoul Office in Jongno-gu, Seoul. Attending the briefing were Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, Minister of Justice Park Beom-gye, Minister of the Interior and Safety Jeon Hae-cheol, Minister of Land, Infrastructure and Transport Byun Chang-heum, Minister of Agriculture, Food and Rural Affairs Kim Hyun-soo, Financial Services Commission Chairman Eun Sung-soo, Anti-Corruption and Civil Rights Commission Chairperson Jeon Hyun-hee, and Director of the Office for Government Policy Coordination Koo Yoon-chul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Moon Jiwon] From now on, when acquiring land of 1000㎡ or more, or worth 500 million KRW or more, a funding plan must be submitted. In this case, it is expected that cases of land speculation under borrowed names will significantly decrease.

The reward for reporting real estate market disruption acts will be expanded up to 1 billion KRW. To prevent fraudulent land transactions by planned real estate companies, a registration system for 'real estate trading business' will be introduced, and suspicious speculative transactions will be investigated in advance before new housing site announcements.

The government announced these measures as part of the 'Real Estate Speculation Eradication and Recurrence Prevention Plan' on the 29th.

Proof of Funds Required for Land Transactions of 1000㎡ or 500 Million KRW or More

First, it will be mandatory to submit a funding plan to local governments when acquiring land above a certain scale. Currently, the plan under review targets land of 1000㎡ or more by area, or 500 million KRW or more by value.

This expands the current requirement, which applies only to apartments and similar properties, to land as well. Once the funding plan submission is mandatory, cases of purchasing land under borrowed names using relatives are expected to significantly decrease.

The government plans to investigate funding plans for land transactions within a certain period before announcing large-scale housing site designations through the Real Estate Transaction Analysis Institute. This will apply to housing sites announced after the Real Estate Transaction Reporting Act is amended and the funding plan submission system is established.

Accelerating Launch of Dedicated 'Real Estate Transaction Analysis' Organization

The government has decided to promptly launch the 'Real Estate Transaction Analysis Institute' through amendments to the Real Estate Transaction Reporting Act. The institute will serve as a control tower to monitor abnormal transactions in the real estate market and analyze and investigate market disruption acts. It will exclude investigative functions.

The institute will include personnel from the Ministry of Land, Infrastructure and Transport, Financial Services Commission, National Tax Service, police, as well as private experts in finance, appraisal, taxation, and accounting from the Financial Supervisory Service and Korea Real Estate Board. To enable the institute to respond swiftly and effectively to market disruption acts, it will be granted limited authority to access personal financial and tax information.

To fill the gap before the institute is launched, the Ministry of Land, Infrastructure and Transport will first establish a Real Estate Transaction Analysis Planning Team of 20 to 30 members next month.

Up to 1 Billion KRW Reward for Reporting Disruptive Acts

The government will expand rewards for reporting real estate market disruption acts up to 1 billion KRW. Currently, a maximum reward of 10 million KRW is given for reporting false contracts, but the related performance has been low.

From June 2017 to June 2019, only 19 cases received reward payments.

Additionally, the leniency system, which mitigates punishment for voluntary reporting of real estate disruption acts, will be expanded, and grounds will be established to exclude aggravated penalties on unjust gains when voluntarily reported. Currently, for disruption acts subject to fines such as false reporting, full exemption of fines is granted if voluntarily reported before investigation.

The Ministry of Land, Infrastructure and Transport will introduce a registration system for 'real estate trading business' to prevent fraudulent land transactions by planned real estate companies.

Planned real estate companies usually establish corporations, sell land with low development potential at high prices by fabricating favorable conditions, and then exit by changing or closing the corporation. To prevent this, the registration system will strengthen conditions for establishing, changing, or closing corporations involved in real estate trading business.

Investigation of Land Transactions Before New Housing Site Designations

From next month, before announcing new public housing sites, the Ministry of Land, Infrastructure and Transport will select land suspected of speculation and conduct detailed investigations into speculative suspicions. If suspicious cases are found, investigations will be immediately requested.

For the second new housing sites to be announced next month, the government plans to check abnormal transactions by reviewing real estate transaction volumes before and after the candidate site announcement. The government explained, "If necessary, investigations and verifications will be requested."

After the amendment of the Public Housing Act, regular and ad hoc investigations into extensive land transaction records within development planned areas by employees of Korea Land and Housing Corporation (LH) will be conducted.

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