272 Cases of Suspicious Illegal Transactions Detected, Including Illegal Overseas Fund Inflow and Unqualified Visa Leasing Business

Crackdown on Illegal Activities in Foreign Residential and Officetel Transactions
Suspicious Cases Reported to the National Tax Service and Related Agencies

On the 21st, the Ministry of Land, Infrastructure and Transport announced that it had detected a total of 272 suspicious illegal transactions (127 housing cases and 145 officetel cases) through a planned investigation of actual transactions to crack down on illegal activities in housing transactions (second phase) and officetel transactions by foreigners.

This planned investigation was promoted with the purpose of cracking down on illegal activities related to real estate transactions by foreigners, following the planned investigations on illegal activities in foreign housing transactions and land transactions.

The second phase of the foreign housing transaction investigation selected and examined 227 suspicious abnormal transactions suspected of illegal activities out of 7,005 foreign housing transactions nationwide from June 2022 to May 2023.

Additionally, the investigation into foreign officetel transactions focused on 245 suspicious abnormal transactions suspected of illegal activities among 7,520 cases conducted from January 2018 to June 2023, mainly involving foreign officetel transactions.

As a result of investigating a total of 472 abnormal transactions, the Ministry of Land announced that 423 suspected illegal acts were detected in 272 transactions (57.6%).

By type, there were 36 cases suspected of illegal inflow of overseas funds. These involved foreigners carrying more than $10,000 in cash from overseas without reporting it or illegally bringing in real estate acquisition funds through so-called 'hawala' without going through foreign exchange banks, and failing to report these funds.

Seventeen cases of unqualified visa rental businesses were detected, where individuals stayed with work-restricted visas such as the Visit Employment Visa (H2) and operated rental businesses without activity permits.

There were 10 cases where related parties (parents, corporations, etc.) lent real estate transaction funds to buyers (children, corporate representatives, etc.) without promissory notes or where verification of proper interest payments was required.

Additionally, there were 4 cases where individual business owners took out loans from financial institutions for corporate operating funds but actually purchased real estate such as housing, and 20 cases suspected of reporting transaction amounts different from the actual transaction prices during housing transactions.

Other notifications to related agencies included 105 cases reported to the National Tax Service for suspected disguised gifts, 36 cases to the Korea Customs Service for illegal inflow of overseas funds, 257 cases to local governments for false reporting of declared prices, 17 cases to the Ministry of Justice for unqualified visa rental businesses, and 8 cases to the Financial Services Commission and others.

The government plans to notify related agencies such as the National Tax Service, Korea Customs Service, Ministry of Justice, Financial Services Commission, and local governments of the cases detected in this planned investigation to ensure follow-up measures such as criminal investigations and fines are taken. Regular planned investigations on foreign real estate transactions will continue in the future.

Won Hee-ryong, Minister of Land, Infrastructure and Transport, stated, "It is significant that the planned investigation of actual transactions focused on illegal activities in foreign real estate transactions and that the system to eradicate foreign speculation, which had been in a blind spot, has been improved."

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