On May 19, the NTS announced that it has identified a total of 127 individuals as targets for investigation, including cash-rich buyers outside loan regulations, multiple homeowners seeking capital gains, and purchasers of ultra-high-priced apartments.
The categories of those under investigation include: cash-rich individuals unaffected by loan regulations, excessive private debt holders, multiple homeowners aiming for capital gains, and buyers of properties valued at over 3 billion won (approximately $2.3 million). The total value of the properties acquired by the individuals under investigation is estimated at around 360 billion won (approximately $270 million), with the estimated tax evasion amount reaching about 170 billion won (approximately $128 million).
The NTS noted that as loan regulations have tightened recently, there has been an increase in cases where individuals purchase high-priced apartments using funds from parents or relatives instead of bank loans. One case under investigation involves a child who purchased an apartment in a desirable school district for over 3 billion won entirely in cash, using funds from a father who sold overseas stocks. The NTS is examining the potential for disguised gifts in such transactions.
Instances of "disguised borrowing" using promissory notes are also under scrutiny. One case involved a young professional in their early 30s who borrowed over 1 billion won from their father to buy an apartment in a new city in Gangnam, with a promissory note stipulating repayment of the principal and interest upon the father's death. The NTS suspects this may be an attempt to disguise a gift as a loan.
The NTS is also intensifying its scrutiny of multiple homeowners. It plans to investigate not only the sources of funds used for acquiring additional high-priced apartments but also the overall flow of funds among family members and the process of wealth accumulation.
Transactions in non-Gangnam areas, such as Seongbuk-gu and Gangseo-gu, as well as Gyeonggi Province's Gwangmyeong and Guri, which have recently seen notable price increases, will also be closely monitored. The NTS is analyzing suspected tax evasion based on funding plans shared in real-time by the Ministry of Land, Infrastructure and Transport.
Particularly, properties valued at over 3 billion won will undergo comprehensive verification. Following an initial investigation in October of last year, the NTS is continuing its tax audits, focusing on the sources of acquisition funds and the overall process of wealth formation.
The NTS will also examine the potential misuse of business loans. After a self-correction period in the first half of the year, the NTS plans to conduct a thorough verification of cases involving the use of business loans to acquire high-priced apartments starting in the second half of the year, expanding the scope of investigation to include potential tax evasion across entire businesses.
An NTS official stated, "Tax evasion in real estate transactions undermines tax justice, distorts market order, and creates social deprivation. We will respond strongly until the perception that tax evasion will inevitably be detected becomes established."
* This article has been translated by AI.
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