Home > Business > Economy

Luxury home purchases under scrutiny in real estate tax investigation

Published: 01 Oct. 2025, 17:00

Apartments in Seoul are seen from Namsan Tower on Oct. 1. [NEWS1]

The National Tax Service (NTS) on Wednesday launched tax audits on 104 suspected tax evaders, including young buyers and foreigners, involved in high-end real estate transactions in Seoul.

The investigation centers on luxury home purchases in key districts such as the so-called Gangnam Four Districts — Gangnam, Seocho, Songpa and Gangdong Districts — and “MaYongSeong” areas of Mapo, Yongsan and Seongdong Districts.

Properties traded for over 3 billion won ($2.14 million) are the agency’s primary focus. From late last year through the first half of this year, the NTS reviewed more than 5,000 housing transactions and selected targets whose funding sources appeared suspicious.

Officials are analyzing each individual’s income, assets and occupation to identify possible cases of underreported income or illicit gifts disguised as legitimate funds.

Foreign nationals who purchased high-value homes are also under scrutiny. The agency said it selected foreign buyers who appeared financially unqualified, considering factors such as domestic income, loan history and overseas wire transfers.

The investigation also covers individuals who may be living in expensive rental homes without clear income, or those suspected of receiving large jeonse deposits through disguised gifting. Some are believed to have manipulated the one-home capital gains tax exemption rule by transferring one property — on paper — to a relative while reporting only the more profitable sale.

Park Jong-hee, head of the National Tax Service's (NTS) property tax bureau, speaks during a press briefing at the government complex in Jongno District, central Seoul on Oct. 1. [YONHAP]

One case involves a man in his 20s who recently purchased an apartment in Seoul worth over 2 billion won. Before the transaction, his father liquidated existing real estate and foreign stocks to secure tens of billions of won in cash.

The funds were not accounted for, and no gift tax declaration was filed. Authorities believe the man was secretly gifted the funds and plan to audit the transaction.

“We will exhaust all available tools to track hidden funds and collect all evaded taxes without exception,” said Park Jong-hee, head of the NTS property tax bureau.

The NTS also signed a memorandum of understanding with the Ministry of Land, Infrastructure and Transport on Wednesday to strengthen oversight of irregular real estate transactions. Both agencies will share investigation findings through regular consultative meetings and explore ways to improve enforcement.

NTS Commissioner Lim Kwang-hyun said the agency aims to achieve “tangible outcomes in cracking down on tax evasion and restoring market order.”

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.
BY JANG WON-SEOK [[email protected]]