Those Forced to Purchase Due to Jeonse Fraud... "Urgent Need for Acquisition and Property Tax Relief"

Moon (48), a tenant of an officetel in Dongtan New Town, Hwaseong-si, Gyeonggi-do, became a homeowner through a transfer of ownership on the 7th. Although it may seem like he achieved the dream of owning a home, Moon expressed frustration. As a victim of a jeonse fraud that occurred in the Dongtan New Town area, he chose to purchase the property to minimize his losses. The damage he suffered from buying the officetel amounts to nearly 30 million KRW. The officetel, valued at 150 million KRW, was not only in a reverse jeonse state but also incurred acquisition tax of 4.6% and various administrative processing fees. The jeonse deposit for the officetel was 168 million KRW, which was 18 million KRW less than the market price. In addition, Moon bore costs of 9 million KRW, including 8 million KRW in acquisition tax and fees for legal services and brokerage. Moon said, “I am also a victim, but I think it is unfair for the government to make those defrauded bear all the costs,” adding, “I hope the government at least provides support for additional costs such as acquisition tax and administrative fees.”

Victims of jeonse fraud held a press conference on the 18th in front of the Presidential Office in Yongsan-gu, Seoul, urging the establishment of measures to address jeonse fraud damage. Photo by Dongju Yoon doso7@

As jeonse fraud damages spread across Dongtan New Town, some victims are calling for tax reductions such as acquisition tax relief. Since the transfer of ownership is an unavoidable step to minimize damage, they argue that the burden should be eased even slightly. However, concerns about fairness have arisen, making it urgent for the government to devise countermeasures.

Following the bankruptcy filing by Mr. Park and his wife, who own about 250 officetels and houses in Hwaseong Dongtan, Suwon, and Osan, another landlord, Mr. Ji, who reportedly owns 43 officetels, also filed for bankruptcy, causing the jeonse fraud damage in Dongtan New Town to escalate rapidly. As of the 23rd, 94 reports of jeonse fraud in the Dongtan area have been filed with the police. Considering that 58 cases were reported on the 19th, the damage continues to grow.

From the victims’ perspective, enduring the damage and quickly winning the auction for their residence is the best way to minimize losses. It is difficult to expect the price to fall below market value through auction failure, as so-called “speculators” may sweep up the properties, preventing victims from winning the bids.

The ruling party, government, and the presidential office (Party-Government-Presidential Office, or PGP) are also discussing measures such as acquisition tax relief in response to public opinion. On the afternoon of the 23rd, the PGP held a meeting at the Prime Minister’s official residence in Samcheong-dong, Seoul, and announced plans to push for special legislation. Park Dae-chul, chairman of the People Power Party’s Policy Committee, explained after the meeting, “We have decided to promote the ‘Special Act for Supporting Jeonse Fraud Victims and Ensuring Housing Stability.’ This is a temporary law aimed at recovering from the disaster-level jeonse fraud damage caused by the previous government’s housing policy failures.”

The special law is expected to include provisions such as “granting priority purchase rights to victim tenants,” “tax relief and long-term low-interest loan support when exercising priority purchase rights,” and “LH (Korea Land & Housing Corporation) purchase rental.” If priority purchase rights are introduced for jeonse fraud victims, when a property defrauded through jeonse goes to auction, the victim will have the right to purchase it at the highest bid price. The government plans to reduce acquisition tax and provide long-term low-interest loans to support victims who proceed with purchases.

Voices have also emerged calling for future property tax reductions alongside acquisition tax relief. Another victim, Kang (30), said, “I had no intention of purchasing the officetel but was forced to buy it. I hope future discussions will also include property tax relief.” Kang’s losses from purchasing the officetel amount to 37.5 million KRW. At the time of the lease contract, the jeonse deposit was 135 million KRW, but the current market price is only 105 million KRW. Acquisition tax and various administrative fees amounted to about 7.5 million KRW. Considering property tax that will arise from the unwanted real estate purchase, the damage continues to increase. Moreover, if the new property purchase causes the total property value to exceed 600 million KRW, the threshold for comprehensive real estate tax, the damage could become even greater.

Certified real estate agent Kim (37) also said, “While the government will work on structural improvements to prevent future jeonse fraud, it seems necessary to immediately ease the burden on victims. Acquisition tax and future property tax are significant burdens when buying a house. Simply reducing these costs would be a great help to victims.”

However, some argue that caution is needed considering fairness issues. Yoon Young-seok, a lawyer at law firm YK, said, “Discussions on tax relief are emerging shortly after the issue became public. Since this is a sensitive matter, a careful approach is necessary. It is important to consider whether there is fairness with other taxpayers legally obligated to pay taxes and whether the same relief can be applied to future victims.”

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