Oh Sang-hun, commissioner of the National Tax Service's (NTS) Property Taxation Bureau announces the result of an investigation of real estate tax evasion in the press room of Government Complex Sejong on July 7.YONHAP
The National Tax Service (NTS) uncovered 73.1 billion won ($48million) in unpaid taxes after investigating real estate tax evasion schemes involving sham property sales, hidden corporate funds and undisclosed gifts.
The agency launched simultaneous tax audits of 104 suspected tax evaders in October last year. So far, it has identified 73.1 billion won in unpaid taxes involving about 80 people and collected an additional 31.8 billion won. Six people suspected of serious tax evasion were referred to prosecutors.
The NTS also imposed a 40 percent penalty on cases involving fraudulent tax filings and ordered four people to pay a combined 700 million won in fines under the Punishment of Tax Offenses Act.
In one case, a homeowner allegedly staged the sale of a low-priced apartment to a friend of their mother to qualify for a tax exemption on the sale of a second, higher-value home.
The homeowner later sold the more expensive apartment for 2billion won while claiming a tax benefit available to single-home owners. Investigators found the first transaction was fictitious because the homeowner continued living in the apartment after the supposed sale and later paid a fee to get the ownership back.
The NTS imposed 1 billion won in capital gains tax and referred the homeowner, the homeowner’s mother and the mother’s friend to prosecutors on tax evasion charges.
Oh Sang-hun, commissioner of the National Tax Service's (NTS) Property Taxation Bureau, gives a briefing of the result of investigation of real estate tax evasion at the press room of Government Complex Sejong on July 7.YONHAP
In another case, investigators found that a property buyer used about 3 billion won in off-the-books corporate funds to finance real estate purchases. The money came from a wholesale meat business operated by the buyer's spouse. The properties included a 4 billion won apartment in Gangnam District, southern Seoul, slated for redevelopment. The NTS imposed 3.1 billion won in corporate and gift taxes.
Authorities also uncovered unreported income from an unregistered travel business targeting foreign tourists. A person bought a 4 billion won apartment in northern Seoul and spent hundreds of millions of won on renovations despite having no reported income to support the purchases. Investigators found the person had failed to report about 6 billion won in cash sales, resulting in an additional 2.5 billion won in value-added and income taxes.
Other cases included sham property transactions arranged through acquaintances to avoid capital gains taxes, unreported gifts used to purchase homes and so-called “parent chance” cases in which wealthy parents funded their children’s investments and living expenses without proper tax filings.
The NTS also notified local governments of 20 people found to have violated the Act on the Registration of Real Estate under Actual Titleholder's Namethrough nominee ownership arrangements, making them subject to administrative penalties and criminal punishment.
The agency said it will continue monitoring tax evasion in all stages of real estate transactions, from acquisition and ownership to sale, with a particular focus on disguised gifts and unpaid gift taxes following the reinstatement of heavier taxes on owners of multiple homes.
“Preventing tax evasion in the real estate market is essential to ensure tax fairness and restore stability and trust in the housing market,” Oh Sang-hun, commissioner of the NTS’ Property Taxation Bureau, said. “We will continue to respond firmly under the principle that tax evasion will always be detected.”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
