Up to 4 Billion Won Reward for Reporting Real Estate Tax Evasion: “Driving Normalization of the Housing Market”

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[Financial News] The National Tax Service (NTS) announced that when it collects unpaid taxes based on reports submitted through the Real Estate Tax Evasion Reporting Center, it can pay rewards of up to 4 billion won.
\r\nAccording to the NTS on the 9th, the Real Estate Tax Evasion Reporting Center, which was established on October 31 last year, had received a total of around 780 reports of tax evasion as of the end of March.
Real estate tax evasion often takes place covertly in private transactions, such as deals between parents and children, making it difficult for outsiders to detect. With help from tax accountants and other experts, a variety of schemes are being used, and the methods are becoming increasingly sophisticated.
In addition, false or distorted tax information disguised as legitimate tax-saving tips is spreading through some online platforms, leading to a trend in which real estate tax evasion is becoming normalized. Because there are limits to what the tax authorities can uncover on their own, public awareness of the seriousness of tax evasion and voluntary participation by ordinary citizens are crucial.
Major types of evasion reported to the Real Estate Tax Evasion Reporting Center include: cases where apartment purchase funds were allegedly gifted by parents but gift tax was not reported; cases where real estate was held under another person’s name through a nominee arrangement to avoid property holding taxes; and cases where a seller forfeited a down payment after a sales contract was canceled but allegedly failed to report it as other income.
The NTS plans to closely analyze suspected evasion by linking reported information with its own extensive tax data. When tax evasion is confirmed, it will conduct thorough tax audits and recover all unpaid taxes.
In particular, when reports submitted through the Real Estate Tax Evasion Reporting Center provide key information that leads to the collection of evaded taxes, the NTS pays rewards of up to 4 billion won in accordance with relevant laws. For example, the agency verified a report about capital gains tax evasion involving fake household separation to obtain a tax exemption, collected the capital gains tax, and paid a reward to the informant.
The NTS expects that active reporting and voluntary participation by the public will be the starting point for eradicating real estate tax evasion, and will play a vital role in establishing a fair tax system and normalizing the real estate market.
An NTS official said, "We urge people to actively report not only tax evasion in real estate transactions, but also speculative actors such as brokers and YouTubers who are suspected of earning illegal profits by disrupting the market through price collusion or price manipulation." The official added, "Going forward, the NTS will strictly protect the identity of informants so it is never disclosed, while handling all reported cases under a zero-tolerance policy."
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syj@fnnews.com Seo Young-jun Reporter