Government tightens reporting rules on foreign real estate deals, scrutinizing visa status and overseas funds

[Financial News] The government is significantly tightening reporting requirements for real estate transactions by foreigners to curb speculative buying. Foreign buyers will be required to report their visa status and address, and must submit a funding plan that includes details of any overseas financing.
On the 9th, the Ministry of Land, Infrastructure and Transport announced that amendments to the enforcement decree and enforcement rules of the Act on Report on Real Estate Transactions, Etc., which strengthen real estate transaction reporting, will take effect on the 10th. The revisions focus on blocking illicit transactions and the inflow of illegal funds by foreigners and others.
Under the amended rules, foreigners who sign a contract to purchase real estate in Korea on or after February 10 must, at the time of reporting the transaction, also submit information that was not previously required. This includes their visa status and either their domestic address or proof that they have resided in Korea for at least 183 days.
Regardless of nationality, anyone who signs a housing purchase contract in a land transaction permit zone after obtaining a land transaction permit will now be required to submit a funding plan and supporting documents. The report must include details of overseas funding sources, such as foreign bank deposits, overseas loans, and the names of foreign financial institutions. Proceeds from the sale of virtual assets, as well as stocks and bonds, must also be reported as part of other funding sources.
In addition, whenever a real estate sale contract is concluded, the parties must attach documents proving payment of the deposit, such as the sales contract and a receipt for the deposit, when filing the transaction report, regardless of nationality or whether the property is in a land transaction permit zone. However, if the buyer and seller file a joint report for a direct transaction without an intermediary, they will continue to be exempt from the requirement to attach these documents.

The Ministry of Land, Infrastructure and Transport will also step up post-transaction oversight as the new system takes effect. Last year, through a targeted investigation into illegal real estate activities by foreigners, the ministry identified 416 suspected violations—326 involving housing, 79 officetels, and 11 land parcels—and referred them to relevant agencies. Building on this, starting in March this year, it plans joint inspections with local governments to check whether buyers are fulfilling mandatory residence requirements in land transaction permit zones. From August, it will also launch a special investigation into suspicious transactions to determine whether overseas funds have been brought in illegally.
Kim Yi-tak, First Vice Minister of Land, Infrastructure and Transport, stated, "With the implementation of these amendments to the Act on Report on Real Estate Transactions, Etc., we have established a stronger framework to closely monitor illegal fund inflows and illicit transactions." He added, "We will continue to respond strictly to various forms of real estate-related illegal activities and, where necessary, pursue institutional improvements in parallel so that genuine end-users are protected and sound order is established in the real estate market."
en1302@fnnews.com Jang In-seo Reporter