A, who bought a Seoul apartment for 13 billion won, borrowed 10.6 billion won interest-free from the father to raise the purchase funds. The Ministry of Land, Infrastructure and Transport reported this to the National Tax Service, viewing it as excessive borrowing from a related party.
A special investigation into abnormal real estate transactions conducted by the Ministry of Land, Infrastructure and Transport in the second half of this year uncovered 1,002 suspected illegal transaction cases. Issues included disguised gifts, diversion of loan funds for nonintended purposes, and price pumping.
The Office for Government Policy Coordination real estate oversight task force held the 4th council on responses to illegal real estate activities on the 24th and announced the results of the Ministry of Land, Infrastructure and Transport (MOLIT)'s special investigation into abnormal real estate transactions conducted in the second half of this year.
The special investigation covered three areas: ▲ abnormal transactions in Seoul and Gyeonggi dwellings ▲ real transaction price pumping in real estate ▲ unusual patterns. In particular, unlike the previous two rounds limited to Seoul, this round targeted transactions across Gwacheon, Seongnam Bundang and Sujeong districts, Yongin Suji district, Anyang Dongan district, and all of Hwaseong.
A total of 1,445 abnormal transactions were investigated, uncovering 673 suspected illegal transactions and 796 suspected illegal acts. Of the 673 suspected illegal transactions, 572 were in Seoul and 101 in Gyeonggi (including 43 in Gwacheon and 50 in Seongnam Bundang).
In this investigation, 496 cases were found in which related parties such as parents or corporations provided lending of dwelling transaction payments to children or corporate representatives without drafting a promissory note or without paying proper interest. There were also 160 cases suspected of reporting transaction amounts and contract dates different from the actual ones during dwelling transactions.
There were also 135 cases suspected of individual business owners purchasing dwellings after borrowing from financial institutions under the guise of corporate operating funds.
Many cases of disrupting real estate market prices through "price pumping" were also uncovered. The Ministry of Land, Infrastructure and Transport (MOLIT) conducted a special investigation into suspected price pumping through cancellation filings among Seoul apartment transaction reports from March 2023 to August this year, and found 161 suspected illegal acts in 142 transactions out of a total of 437 abnormal transactions. MOLIT asked police to investigate a total of 10 cases.
A corporation bought a Seoul apartment from B and C for 1.65 billion won, higher than the previous price. B is an inside director of the corporation, and C is B's spouse. The contract remained in force for about nine months before being canceled, after which B and C sold the apartment to a third party for 1.8 billion won. The Ministry of Land, Infrastructure and Transport (MOLIT) confirmed that the transaction appeared to have been canceled by mutual agreement with the down payment and interim payment yet to be returned and that the contract contained a special clause on the possibility of cancellation, and, suspecting a false filing, asked the Korean National Police Agency to investigate.
In this special investigation, MOLIT also caught unusual transactions such as multiple purchases of dwellings by minors and low-priced allocations of presale rights in new apartment complexes. Investigating a total of 334 abnormal transactions among filings from January to July this year, officials found 250 suspected illegal acts across 187 transactions.
For transaction reports from September to October this year, MOLIT plans to expand those surveyed beyond regulated areas in Seoul and Gyeonggi after the Oct. 15 measures to include areas of concern for balloon effects such as Guri and Namyangju.
In addition, MOLIT plans to strengthen monitoring and analysis of market-distorting behavior by introducing a method to categorize reasons for cancellation in the real estate transaction contract cancellation report form.
Kim Gyu-cheol, head of the dwellings and land office at MOLIT, said, "MOLIT will continue to respond strictly to speculative and illegal transactions through special investigations into abnormal real estate transactions," adding, "We will continue our efforts to create a market environment where genuine end users can trade with confidence."