Foreigners' 'K Real Estate Shopping' with Unknown Funding Sources Despite Purchasing 19 Apartments

Foreign national A recently purchased 19 apartments and multi-family houses in the Gyeongnam area for 1.6 billion KRW over the past few years. Of this, no source of funds was disclosed for 600 million KRW.

Foreign national B, who bought an apartment in Seoul, claimed, "I brought foreign currency within the non-reportable import limit (10,000 USD per day) while traveling between abroad and Korea to purchase the property." The apartment he purchased was worth 4.2 billion KRW.

Foreign national C received a cash transfer of 1.45 billion KRW from his Korean mother. Although he said it was payment received from selling Bitcoin to his mother, it is suspected to be an illicit gift.

Amid soaring real estate prices, foreign nationals' domestic home purchases have surged, and numerous unusual trends such as illegal inflow of overseas funds during foreign nationals' housing transactions have been identified. The Ministry of Land, Infrastructure and Transport recently conducted a planned investigation into actual transactions to crack down on illegal activities by foreigners in real estate and announced the results on the 28th.

Foreign nationals can also obtain loans through banks in their home countries when acquiring domestic housing, giving them relatively greater financial capacity compared to domestic residents. It has also been difficult to grasp household status necessary for applying heavy taxation on multiple homeowners, leading to ongoing controversies over reverse discrimination against domestic residents.

The government conducted a focused inspection on 20,038 housing transactions over the recent two years of rapid foreign purchases (January 2020 to May 2022) and selected 1,145 suspicious transactions. After requesting and analyzing explanatory documents for these 1,145 cases, 567 suspected illegal activities were detected.

The most common cases, totaling 273, involved false reporting of contract dates or failure to submit explanatory documents.

There were 121 cases where cash exceeding 10,000 USD was brought in from overseas without reporting, or acquisition funds were illegally brought in without going through foreign exchange banks.

Fifty-seven cases were detected where individuals entered on a visiting cohabitation visa (F1), which does not allow economic activities, and engaged in rental businesses.

There were 30 cases of illicit gifts received from parents or relatives, and 22 cases of misuse beyond loan purposes and violations of LTV regulations.

Foreign nationals have steadily purchased homes in Korea since around 2017, when housing prices began to rise significantly. Even amid an overall market downturn, the proportion of foreign buyers among total home purchases increased from 0.81% (8,186 cases) in 2021 to 1.21% (6,772 cases) from January to September this year.

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