The People Power Party is pushing for the introduction of a pre-approval system for foreign real estate transactions. Several legislative amendment proposals to change the current reporting system to a permit system have been introduced, and the party plans to pursue this as its official stance.
The real estate market stabilization response task force of the People Power Party held a discussion on 'Investigating the actual status of foreign real estate and preventing reverse discrimination' on the 31st at the National Assembly in Yeongdeungpo-gu, Seoul. At the discussion, the party leadership, including Song Eon-seok, chair of the emergency response committee and floor leader, Kim Jeong-jae, chair of the policy committee, and Kwon Young-jin, who serves as the secretary of the Land Infrastructure and Transport Committee, were all present.
As of the end of last year, the number of dwellings owned by foreigners stood at 100,216, exceeding 100,000 for the first time. It is also notable that over 70% of these dwellings are concentrated in the metropolitan area, with 39.1% in Gyeonggi, 23.7% in Seoul, and 10.0% in Incheon. By type of dwelling, apartments accounted for 60% with 60,654 units.
In Seoul alone, 23,741 dwellings, approximately 0.8% of the total, are owned by foreigners. By nationality, Americans constitute the largest group at 37.4%, followed by Chinese at 32.7%. Jeong Jong-dae, head of the Seoul real estate policy development center, stated, 'Among the 12,736 apartments owned by foreigners in Seoul, 58% of those in the three districts of Gangnam are owned by Americans, while 61.4% of those in Guro, Geumcheon, and Yeongdeungpo are owned by Chinese,' adding that 'the ratio of reported transactions among foreign-owned apartments in Seoul is 18.6%.'
As the number of dwellings owned by foreigners increases, the detection of anomalous transactions is also rising. The government conducts periodic investigations into anomalous transactions in foreign real estate, and between June 2023 and June 2024, the number of detected anomalous transactions involving foreigners reached 419, accounting for 4.5% of the total transaction count. In comparison, the number of anomalous transactions among domestic real estate transactions in Seoul during the same period was just 0.45%. This means that anomalous transactions by foreigners are ten times more prevalent.
The People Power Party stated that there are many gaps in the management of foreign real estate transactions in the country and announced plans to propose a legal amendment focused on introducing a pre-approval system for foreign real estate transactions. Earlier, in July alone, People Power Party lawmakers Kim Eun-hye, Joo Jin-woo, Kim Jeong-jae, and Kang Dae-sik, along with Democratic Party of Korea lawmaker Lee Eon-joo, introduced bills to strengthen regulation on foreign real estate transactions.
The proposal by lawmaker Kim Eun-hye aims to change the method of foreign real estate transactions from the existing reporting system to a permit system and to stipulate the 'principle of reciprocity' in the law. The proposal by lawmaker Lee Eon-joo also requires foreigners to receive prior approval when purchasing real estate and sets a residency requirement period for foreigners acquiring dwellings in Korea.
Lawmaker Kim Jeong-jae, who attended the discussion, emphasized, 'In Singapore, when foreigners without permanent residence purchase real estate, they are taxed up to 65% additional acquisition tax, and in the United States, part of the transaction amount is withheld when foreigners engage in real estate transactions. We also need to prepare various measures to prevent reverse discrimination against domestic residents.'