A couple of foreign nationality purchased an apartment in a speculative overheating zone in Seoul for 5.3 billion won. The husband borrowed money from a corporation where he is the representative, and the wife also borrowed some funds from her husband's company. They paid 60% (3.15 billion won) of the apartment price using a borrowing fund from a related party, and it is suspected that Mr. B received a circumvention gift from his parents. The Ministry of Land, Infrastructure and Transport is expected to notify the National Tax Service of the couple for suspicion of excessive borrowing funds from related parties and circumvention gifting.
The Ministry of Land, Infrastructure and Transport announced on the 22nd that it identified 282 suspected illegal transactions during a planned investigation of foreign real estate transactions.
From June of last year to this June, 557 cases of illegal transactions involving foreigners in dwellings, land, and officetels were investigated, revealing 433 instances of illegal suspicious actions in 282 transactions (50.6%).
Among the identified cases, the most common was 77 instances of illegally bringing funds from overseas. This was a so-called "hawala" case where individuals brought in cash exceeding $10,000 without reporting it or illegally importing funds without going through foreign exchange banks. The reporting limit for imports is $10,000 per day.
There were 15 cases identified of engaging in rental businesses while residing on a visit employment visa (H2), which does not permit profit-making activities. Additionally, there were 15 cases of suspected circumvention gifting among related parties, such as between parents and children or between corporations and their representatives.
There were also 7 cases where individual business owners borrowed funds from financial institutions for "corporate operating funds" but actually used the money to purchase real estate. A foreigner, Mr. A, borrowed 260 million won from a bank for purposes of "corporate facility funds" and used it to buy an officetel in Gyeonggi Province worth 450 million won, which led to detection.
An analysis of the 433 identified cases of suspected illegal activity by nationality showed that Chinese individuals accounted for the most at 192 cases (44.3%), followed by Americans with 100 cases (14.9%) and Australians with 22 cases (5.4%).
By region, there were 128 suspected illegal activities in the Gyeonggi area (29.6%), 64 in Seoul (14.8%), and 59 in Chungbuk (13.6%). The metropolitan area accounted for 53.6% of the total.
The Ministry of Land, Infrastructure and Transport plans to notify the National Tax Service, the Tariff Authority, the Ministry of Justice, and the Financial Services Commission, as well as local governments, about the suspected illegal activities identified in this investigation so that subsequent actions such as criminal investigations and fines can be implemented.