Suspicious foreign real estate deals in Seoul double in a year

The number of suspicious foreign real estate transactions in Seoul referred to authorities for suspected violations more than doubled in a single year, with high-end properties at the center of the surge.

As tightened lending rules have made it harder for South Koreans to buy homes, foreigners appear to have taken advantage of a tax regime that treats them nearly the same as citizens — tapping overseas financing, illegally moving funds into the country, and using roundabout gift arrangements to go on a Seoul property shopping spree.

According to national audit data the Ministry of Land, Infrastructure and Transport submitted Tuesday to People Power Party lawmaker Kim Jong-yang's office on the National Assembly's land and transport committee, the number of flagged foreign real estate transactions in Seoul rose from 64 in 2024 to 135 last year.

The increase was especially pronounced in high-value deals. Referrals involving transactions of 3 billion won ($2.23 million) or more more than doubled, from 29 to 62 cases over the same period, while deals in the 1 billion-to-3 billion won range grew from 18 to 28 cases.

By nationality, Chinese nationals topped the list. Of the 383 referrals recorded by nationality last year, Chinese nationals accounted for 184 cases, or 48 percent — nearly half — followed by Americans at 107 cases.

The ministry selectively investigates transactions that show signs of irregularities in payment or financing. When an investigation finds grounds to suspect violations — such as illegal transfer of overseas funds, roundabout gift arrangements, or false reporting — the case is referred to the relevant authorities.

Foreign ownership of land in South Korea has also been rising steadily.

The number of land parcels held by foreigners grew 18.6 percent from 167,725 at the end of 2021 to the end of last year. The officially assessed value of that land climbed 6.5 percent over the same period, from 32.06 trillion won to 34.14 trillion won.

Chinese nationals drove much of the increase: the number of parcels they held rose 32.8 percent, from 64,171 to 85,237, while the assessed value of their holdings jumped 31.0 percent, from 3.28 trillion won to 4.3 trillion won.

As domestic lending restrictions have been sharply tightened in recent years, concerns about an uneven playing field between South Korean and foreign buyers have been raised consistently.

Financing plans filed for Seoul home purchases from February through April this year show that 52.2 percent of foreign buyers left the bank loan field blank, compared with 38.4 percent of South Korean buyers — a significant gap.

"While the government keeps its monitoring framework unchanged and squeezes citizens with loan limits and taxes, high-priced purchases by foreigners are in effect being left unchecked," Kim said.