The National Tax Service said on the 30th that its verification of funding plans for purchasing dwellings, received from the Ministry of Land, Infrastructure and Transport, uncovered multiple signs of tax evasion, including gift tax as well as income and corporate taxes. The agency said it selected as those surveyed people whose entries on the funding plans were inconsistent with facts or whose funding sources were unclear, and collected back taxes that had been evaded.
In the process, the National Tax Service also checked not only the funds used to purchase new apartments but whether "parental help" had been used when purchasing previously owned apartments in the past. According to "cases of tax collection using funding plans" released by the National Tax Service, cases of receiving acquisition funds as de facto gifts from parents were frequent.
According to the National Tax Service, A, a first-year employee in their 30s, said they would fund the purchase of an ultra-high-priced apartment in Seoul for tens of billions of won by using tens of billions of won from selling an apartment already owned. While selling an existing apartment to acquire a new apartment seemed feasible, the National Tax Service looked into what funds A had used in the past to buy the previously owned dwellings. The investigation found that A had acquired the apartment entirely with cash gifted by the mother. The National Tax Service collected several hundred million won in gift tax from A.
Cases were also found where people failed to report income, such as by omitting sales, or diverted corporate funds improperly to purchase apartments.
B, who runs a private clinic, acquired a high-priced apartment in Seoul slated for reconstruction for tens of billions of won and submitted deposits of tens of billions of won as the funding source. The National Tax Service judged that B's deposits were large compared with reported income. The investigation confirmed that B had received noncovered medical fees in cash and failed to report them. The National Tax Service collected income tax of tens of billions of won from B.
C, the head of a corporation operating an agricultural wholesale business, acquired a high-priced apartment along the Han River for tens of billions of won and submitted tens of billions of won in the jeonse deposit from an existing residence as the funding source. However, because this differed from the actual jeonse contract amount, an investigation found that the apartment had been purchased with funds from unreported cash sales of the corporation's agricultural products. The National Tax Service collected several hundred million won, including corporate tax.
There was also a case of signing a sham jeonse contract with parents. D, a university student, purchased a high-priced mixed-use apartment in Seoul for tens of billions of won and submitted a jeonse deposit of tens of billions of won as the funding source. The National Tax Service's investigation found the deposit had been raised by entering into a fake jeonse contract with parents in the same household. The National Tax Service also collected several hundred million won in gift tax from D.
Oh Sang-hun, Director General of the National Tax Service's Asset Taxation Bureau, said, "We will focus all our capabilities on blocking speculation and tax evasion in the real estate market to restore market order and tax justice," adding, "We will greatly strengthen funding-source verification for high-priced apartment acquisition transactions and closely examine whether gift tax has been properly reported for gift transactions."
Oh added, "We plan to look into not only parents providing large sums without filing gift reports to help with dwellings purchases, but also de facto gifts made by repaying loan interest on behalf of children," and "We will also keep in mind that de facto gifts may shift to mid- to low-priced apartments to evade verification of high-priced apartments, and we will look closely at that as well."