The government is significantly strengthening transaction reporting requirements to block real estate speculation by foreigners and illegal fund inflows.
The Ministry of Land, Infrastructure and Transport announced on the 9th that it will implement revised enforcement decrees and rules of the Real Estate Transaction Reporting Act starting from the 10th, mandating visa status reporting and overseas fund sourcing disclosure.
Foreigners who sign contracts to purchase domestic real estate after the 10th must report their visa type and address, which were not previously required. To filter out speculative transactions linked to resident taxpayer criteria under the Income Tax Act, disclosure of residence status for 183 days or more becomes mandatory.
Additionally, regardless of nationality, those signing housing transaction contracts in land transaction permit zones must now submit funding plans and supporting documents when reporting transactions, which were not previously required.
Funding plan disclosures now include overseas fund sourcing details such as foreign deposits, foreign loans, and names of overseas financial institutions. Other fund sources will newly include cryptocurrency sale proceeds in addition to stock and bond sale proceeds.
Regardless of nationality or land transaction permit zone status, those signing real estate purchase contracts after the 10th must attach documents proving down payment, such as purchase contracts and down payment receipts, when reporting transactions. This excludes cases where direct transaction parties file joint reports.
The Ministry detected 416 cases of illegal real estate activities by foreigners in last year's planned investigation—326 housing units, 79 officetels, and 11 land parcels—and notified relevant agencies including the Korea Customs Service. Starting March this year, the Ministry will inspect compliance with actual residence requirements in permit zones, and from August, will focus on verifying illegal overseas fund transfers through planned investigations of suspicious transactions.
"This revision establishes a foundation for more thorough inspection of illegal fund inflows and irregular transactions," said Kim Yi-tak, First Vice Minister of Land, Infrastructure and Transport. "We will continue to respond firmly to various forms of real estate illegalities and improve systems as needed to establish market order that protects end-users."