Person A sold one of two apartments owned for 2 billion won and did not pay a single won in capital gains tax. In Person A's case, the higher tax rate for owners of multiple homes should have applied, and 1 billion won in capital gains tax should have been paid. But before selling the apartment, Person A transferred another home under their name to an acquaintance, reported being a single-home owner, and received a capital gains tax exemption.
According to a National Tax Service investigation, Person A continued living in the apartment said to have been transferred to the acquaintance. It was also was found that Person A paid the acquaintance's acquisition and property taxes and gave the acquaintance hundreds of thousands of won every month. The National Tax Service collected the unpaid capital gains tax from Person A and reported Person A and the acquaintance to prosecutors on suspicion of tax evasion.
The National Tax Service said on the 7th that it collected 31.8 billion won in unpaid taxes from more than 80 suspects of real estate tax evasion. Of those, six were reported to prosecutors on suspicion of tax evasion. This follows the launch in Oct. last year of simultaneous tax audits into 104 suspects of real estate tax evasion involving ultra-high-priced homes in Seoul's Gangnam and the areas known as Ma, Yong, Seong (Mapo, Yongsan, Seongdong). A National Tax Service official said, "Their amount of evasion comes to 73.1 billion won."
This investigation uncovered several cases in which owners of multiple homes posed as single-home owners to obtain capital gains tax exemptions. Person B, who owned two homes, transferred only the title of a metropolitan area apartment to an acquaintance and received a tax exemption when selling a detached house for 1.5 billion won. According to the National Tax Service, Person B secretly delivered the apartment transaction price to the acquaintance through a friend and coworkers to make it appear the acquaintance had actually bought the apartment.
There were also cases uncovered in which people lived in expensive apartments with money gifted by their parents and did not pay gift tax. Person C, in their 40s, was unemployed and lived in an apartment in Seoul's Gangnam with monthly rent exceeding 7 million won. It was also was found that Person C spent hundreds of millions of won each year on living expenses and bought tens of billions of won worth of stocks. According to a National Tax Service investigation, Person C received more than 2 billion won in total from landlord parents for rent, stock investment funds, and living expenses without paying gift tax. The National Tax Service collected 1.3 billion won in gift tax from Person C.
The National Tax Service said it plans to verify whether there are any expedient gifts, such as undervaluing gifted assets or paying gift tax on someone's behalf, given concerns that gift transactions may increase after the reinstatement of the higher tax rate for owners of multiple homes.