SEOUL, Oct. 28 (Korea Bizwire) — South Korea will continue to look into suspicious real estate transactions by foreigners as a recent investigation found increasing illegalities involving foreigners’ home purchases, the land ministry said Friday.
The portion of suspicious home purchases by foreigners rose to 1.21 percent, or 6,772 cases, out of the country’s total 560,000 suspicious cases this year through September, the Ministry of Land, Infrastructure and Transport said in a statement.
The portion is already higher than 0.81 percent for all of last year.
Unlike local citizens subject to strict lending rules and other regulations, foreign nationals have more leeway in financing their residential property purchases in Korea, causing a “reverse discrimination” dispute.
Foreigners reportedly often take out loans for the entire amount to buy a house or multiple homes and they can borrow money from banks in their home countries for home purchases here.
The government conducted a multi-ministry investigation into 1,145 suspicious cases by foreigners from June to September and found 567 of them involved illegalities such as expedient gift, nominal trust, and price inflating to encourage speculation, the statement said.
In the findings, foreigners brought cash worth more than US$10,000 with them without reporting to the Korean authorities or purchased multiple homes and offered home rental services without approval from the local government, it said.
In Korea, foreigners can get mortgage loans from local financial institutions under the local lending rules when they purchase a residential home and have to pay home-related taxes.
If those illegalities are confirmed, those involved will be subject to tax audits or fines.