397 Cases of Abnormal Real Estate Transactions Detected – Cases of Gift Evasion and Transaction Violations

The Ministry of Land, Infrastructure, and Transport has announced the detection of 397 cases of suspected illegal transactions from over 2,000 abnormal real estate transactions conducted in the metropolitan area this year. 

The Ministry of Land, Infrastructure, and Transport has announced the detection of 397 cases of suspected illegal transactions from over 2,000 abnormal real estate transactions conducted in the metropolitan area this year. Various cases of gift evasion and loan regulation violations have been confirmed, particularly concentrated in the Gangnam area of Seoul. This post will explore the illegal trading practices in the real estate market and their implications.

In 2024, the Ministry of Land, Infrastructure, and Transport reported the detection of 397 suspected illegal transactions in real estate trading, primarily in the metropolitan area. The majority of these cases were related to “gift evasion” and “corporate fund misuse,” totaling 315 cases. One notable case involved an individual, referred to as A, who purchased an apartment for 2.1 billion KRW without using any of his own funds, raising suspicions of gift evasion. He financed the purchase with 1.4 billion KRW borrowed from his mother, 550 million KRW received as a gift, and a 350 million KRW mortgage.

Another individual, referred to as B, claimed in his funding plan to finance a purchase of 2.15 billion KRW by drawing from his savings but failed to submit any supporting documentation, raising suspicions of violating transaction reporting laws and tax evasion. Such trading practices undermine the transparency of the real estate market, highlighting the need for stricter regulations.

The investigation also revealed that the Gangnam area, including Seocho and Songpa districts, is a major focus for suspected illegal transactions. These districts are central to real estate trading, and there have been allegations of price collusion. Some residents of specific apartment complexes reportedly encouraged others not to solicit sales below a certain price through open chat rooms on social media, leading to suspicions of collusion.

Additionally, the Ministry analyzed more than 187,000 apartment transactions reported nationwide in the latter half of last year and found 518 cases of “unregistered transactions.” These unregistered transactions, where deals are canceled after being reported, are highly likely to be part of schemes such as artificially inflating housing prices, prompting further investigations.

The results of the Ministry of Land, Infrastructure, and Transport’s investigation into abnormal real estate transactions reveal that illegal activities such as gift evasion, transaction reporting violations, and loan regulation breaches are still prevalent in the real estate market. The concentration of these violations in the Gangnam area raises concerns about the lack of transparency and the potential disadvantages faced by the general public. Moving forward, the government must implement stricter investigations and regulations to enhance the transparency and fairness of the real estate market.