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| Apartment complexes in Seoul / Yonhap |
By Lee Kyung-min
The government is being urged to set up a system to compile data on properties owned and traded by foreign nationals to better identify taxable income and prohibit speculation amid their suspected growing presence in the property market, a ruling party lawmaker said Tuesday.
A comprehensive set of data is needed to establish the legal groundwork to ensure foreign property owners pay tax for windfall gains made through a variety of tax incentives and lending rules that were initially created to induce foreign investment to bolster Korea's economy.
Rep. Kim Hoi-jae of the ruling Democratic Party of Korea (DPK) said the land ministry with the cooperation of the Korea Appraisal Board (KAB) should promptly initiate necessary processes to set up the system.
"The only way for the government to identify the number and value of houses bought by foreigners is to make inferences from tax returns preserved by the National Tax Service," he said during a meeting of the Land Infrastructure & Transport Committee at the National Assembly, Monday.
According to data from the tax agency, non-Koreans bought a total of 23,167 houses with a combined value of 7.68 trillion won between 2017 May 2020.
The number of houses bought has been on a steady rise over the past few years.
The figure jumped to 7,371 in 2019, up from 6,974 in 2018 and 5,308 in 2017. A total of 3,514 houses were bought by them in the January-May period, up 27 percent from the year before.
The lawmaker said prompt action is need since a related law was revised in January 2017, paving the way for the government to collect and store information about property transactions made by foreign investors.
"Data in detail about houses owned by foreigners will be crucial to understand how much of an impact and influence they have in the property market and how best to outline related policies accordingly," he added.
The recommendation followed data that showed the number of houses bought by foreigners has doubled over the past year.
Data submitted to DPK lawmaker Park Sang-hyuk from the KAB showed 5,496 transactions were made by non-Koreans in the first eight months of 2020, already nearing the 5,741 reported in 2019.
Of them, purchases accounted for over two-thirds, or 69.6 percent, while the remaining 1,671 transactions were sales.
Of note is the steep rise in the number of houses bought in Gyeonggi Province where 2,669 transactions have been reported for the January-August period.
The uptrend has been continuing since 2017 when the figure was 1,875. It was 2,329 in 2018 and 2,444 in 2019. Houses bought in the province numbered 2,004 in the first eight months of this year, more than triple the 665 sold in the same period last year.
Foreign investors bought 925 houses in Seoul in the January-August period.
