3,456 cases of suspected illegal real estate transactions detected
‘Illegal donations – misappropriation of corporate funds’ reaches 68%
Survey of all transactions in the metropolitan area until April next year
Mr. A purchased an apartment in Seoul for 1.2 billion won last year. The transaction was also registered in the Ministry of Land, Infrastructure and Transport’s real transaction price system, and the Ministry’s investigation revealed that Mr. A received 45 million won in refunds from the seller after paying the balance. A Ministry of Land, Infrastructure and Transport official said, “Mr. A and the seller were confirmed to be sisters,” and “It is suspected that they falsely reported the transaction price to inflate the house price or reduce future transfer taxes.”
The Ministry of Land, Infrastructure and Transport announced on the 13th that among the 7,275 cases of irregular real estate transactions that took place from May 2022, when the current government took office, to the end of last year, it detected 3,456 cases (47.5%) suspected of illegal activities, such as Mr. A’s case, and reported them to the relevant organizations. In addition, starting today, it began a planned investigation into suspected illegal transactions that disrupt the market, such as ‘housing price inflation’ and ‘housing price collusion’.
According to the Ministry of Land, Infrastructure and Transport, among the types of illegal suspected acts detected, ‘illegal donations and misappropriation of corporate funds’ were the most common, at 2,353 cases (68.1%). Mr. B sold a 2.7 billion won apartment owned by a corporation of which he was the representative to his daughter. In the process, the 1.3 billion won loaned by the corporation was used as the daughter’s purchase funds. Mr. B’s daughter purchased the house without putting in a single penny of her own money.
‘False reporting of contract dates and up/down contracts (reporting prices up or down)’ were also detected in 1,480 cases (42.8%). There were 287 cases of ‘violation of loan regulations and misappropriation of loans for purposes other than those intended’ and 10 cases of ‘direct transactions and illegal resale with trustees or brokerage clients’.
As housing prices have recently risen in Seoul and the metropolitan area, the possibility of market disruption has increased, and the government announced that it will begin a planned investigation into irregular housing and land transactions in the metropolitan area starting today. Five on-site inspection teams will be operated from today until the end of this year. Starting with areas where reported transactions are occurring, such as the ‘Gangnam 3-gu (Gangnam, Seocho, and Songpa-gu)’ and ‘Mayongseong (Mapo, Yongsan, and Seongdong-gu)’ in Seoul, the inspection target will be expanded to the entire metropolitan area including the first new town. The inspection will focus on whether illegal activities such as price collusion, false listings, and reports have occurred.
A planned investigation will also be conducted three times until April next year on all reported housing transactions in the metropolitan area this year. The investigation targets transactions that were canceled after reporting, long-term unregistered transactions, short-term multiple purchase transactions, transactions suspected of fraudulent donations, and transactions suspected of violating loan regulations.
As the plan to lift the Seoul Green Belt (development restriction zone) in November was recently announced through the ‘8·8 Housing Supply Measures’, a detailed planning investigation will also be conducted on abnormal transactions of nearby houses and land ahead of this. Transactions suspected of compensation speculation, such as corporate purchases, purchases by outsiders, and short-term multiple-buyer transactions, will be targeted.
Reporter Choi Dong-su [email protected]
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2024-08-15 03:17:40