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| An apartment complex in Seoul is seen in this September file photo. Korea Times photo by Wang Tae-seok |
Customs authorities to monitor funding sources of overseas purchases of Korean real estate
By Park Jae-hyuk
The Korea Customs Service (KCS) will start receiving foreign exchange network data from the Bank of Korea (BOK) every month starting early next year to monitor whether people residing outside of Korea sourced their money illegally to purchase real estate here.
According to the two institutions, last week, the change will come as a follow-up measure to the Ministry of Economy and Finance's revision of administrative regulations on foreign exchange transactions in June, which enabled the KCS commissioner to access the BOK's data on overseas purchases of domestic real estate.
Before the revision, the customs agency was only able to receive the central bank's data for investigations into suspected violations of the Foreign Exchange Transactions Act.
The finance ministry revised its administrative regulations in the wake of the KCS's announcement in April that it had discovered 17 foreign nationals who had collectively purchased 17 apartments here worth a total 17.6 billion won ($15 million) with money raised illegally.
One citizen of China, who bought an apartment in Seoul worth 1.1 billion won, for example, raised 450 million won through unlawful foreign exchange transactions using cryptocurrencies, according to the agency.
The KCS also found out that 44 overseas residents had not reported their purchases of 39 apartments here worth a total 66.4 billion won, violating the law requiring all overseas-based purchasers of real estate here to report their acquisitions of Korean properties to the BOK or to the commercial banks through which they trade foreign currencies.
The results of the KCS crackdown have fueled concerns among some amid the continued rise in housing prices.
A petitioner argued on Cheong Wa Dae's website that foreign nationals have faced lax inspections on the sources of their money, compared to the regulations on property purchases by South Korean citizens.
Concerns have grown further, since data from the Korea Real Estate Board showed earlier this week that purchase of buildings in Korea by foreign nationals between January and September reached 16,405, a record high in the 15 years the board has been collecting related statistics.
Several politicians have responded to these calls from some voters regarding tightening regulations on overseas transactions of domestic real estate.
Ruling Democratic Party of Korea (DPK) presidential candidate Lee Jae-myung wrote on Facebook in October that he will force foreign nationals to obtain permission to buy domestic real estate in overheated regions nationwide, as he had done in Gyeonggi Province when he was serving as its governor.
"Singapore, Australia and New Zealand have already restricted the overseas purchase of domestic real estate, and Gyeonggi Province designated its 23 cities as areas where foreign nationals and corporations need to get permission for real estate transactions," he said.
DPK lawmaker Rep. Kim Sang-hee proposed a revision of the Act on Report on Real Estate Transactions earlier this month requiring overseas purchasers as well as foreign residents and all corporations to get permission for their real estate transactions in overheated regions in Korea, while exempting Korean nationals from the regulation.
