Seoul is strengthening inspections of foreign real estate transactions. This measure follows concerns about market disruption and reverse discrimination against domestic residents, as there are currently no separate regulations amidst the recent increase in foreign purchases of domestic real estate.
Seoul city announced on the 15th that it will enhance its management system, including verifying funding documentation and conducting thorough investigations of unusual transactions, to ensure transparent foreign real estate transactions.
Recently, concerns have been raised regarding the potential for unusual transactions, such as illegal inflow of overseas funds and improper gifts, alongside the increasing trend of foreign real estate transactions. In particular, there are issues of equity with domestic residents as foreigners could circumvent domestic loan regulations by obtaining loans through overseas financial institutions.
Accordingly, Seoul will closely verify the funding details when foreign real estate transactions are reported. The city plans to selectively investigate transactions under foreign names based on the unusual transaction details received monthly from the Ministry of Land, Infrastructure and Transport.
Additionally, in collaboration with local districts, the city will conduct field checks on occupancy status for foreign purchase transactions within designated land transaction permission zones.
Even after the inspections, Seoul will conduct additional verifications through documents such as funding plans and residency qualification certificates.
For cases where the permitted use obligations have not been fulfilled, the city intends to issue compliance orders. If not corrected, compliance fines will be imposed. These fines may be levied up to 10% of the land acquisition price according to the law regarding real estate transaction reporting.
Furthermore, the city plans to establish a system to continuously manage the status of foreign transactions by collecting transaction data every month with the cooperation of local districts.
Earlier this month, Seoul officially requested the amendment of related laws to the Ministry of Land, Infrastructure and Transport. Currently, a bill that includes mutuality obligations has been introduced in the National Assembly.
Previously, Mayor Oh Se-hoon noted during a regular session of the Seoul City Council on the 11th, "If the real estate price trend is showing an abnormal surge, and if it is analyzed that part of the increase in foreign real estate acquisitions is having an impact, then clearly some measures need to be taken," adding, "We are at the initial stage of reviewing whether there is a need to implement such a system in close consultation with the Ministry of Land, Infrastructure and Transport."
Cho Nam-jun, head of the Seoul Urban Space Headquarters, said, "Based on thorough investigations and status assessments, we will do our utmost to stabilize the Seoul real estate market through effective management."