Gyeonggi-do Launches Special Investigation into Suspected Real Estate False Reports Including Up-Down Contracts

Gyeonggi Province will conduct a joint special investigation with city and county authorities from March to June into suspected false real estate transaction reports and illegal brokerage activities.

The investigation targets a total of 1,703 cases reported between July and December of last year, including ‘up-down contract’ reports aimed at tax evasion and increasing mortgage loan limits, false transaction reports involving high-price declarations without monetary transactions followed by cancellations to manipulate real estate prices, and suspected false reports raised through civil complaints or media coverage.

During this period, Gyeonggi Province will also examine the sources of funds listed in the housing transaction financing plans. In particular, it will focus on ▲ minors acquiring houses priced over 300 million KRW ▲ individuals under 30 years old purchasing high-priced houses exceeding 900 million KRW ▲ and transactions conducted without loans but through other borrowings.

If illegal activities by unqualified persons or licensed real estate agents are detected in transactions reported as direct deals without brokers, the authorities plan to file complaints with investigative agencies.

The investigation will begin by requesting related explanatory documents from the transaction parties. If the submitted documents are insufficient or not provided, an attendance investigation will be conducted. Even if documents are submitted, cases showing significant discrepancies from market prices or strong suspicions of tax evasion such as capital gains tax or gift tax will be reported to the National Tax Service and the relevant tax office.

Those who submit false explanatory documents or report false contracts will face fines of up to 30 million KRW, while those who falsely report transaction prices or other details will be fined up to 10% of the actual real estate transaction value and will be subject to tax audits for suspected capital gains or gift tax evasion.

Gyeonggi Provincial Government

Over the past three years, Gyeonggi Province, together with city and county authorities, has identified 1,105 violators of real estate transaction reporting regulations through special investigations, imposing fines totaling approximately 6.05 billion KRW, and conducted tax audits on 1,781 suspicious cases in cooperation with the National Tax Service.

Individuals who report illegal real estate transactions can receive a reward of up to 10 million KRW. Eligible reports include false contract declarations without monetary transactions or misreported real estate transaction prices, and can be submitted to the real estate management department of the city, county, or district where the property is located.

For example, in May last year, a tip accompanied by concrete evidence was received alleging a down contract in a real estate transaction in Paju City. Following an investigation, the down contract was confirmed, resulting in a fine of over 20 million KRW imposed on the violator and a reward of approximately 3.7 million KRW paid to the informant.

Go Jung-guk, Director of the Land Information Division of Gyeonggi Province, stated, "We plan to focus administrative efforts on investigating illegal real estate transactions to establish a fair and transparent real estate transaction order and realize tax justice," adding, "We also plan to reduce fines for voluntary reporters."

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