Gov’t to require foreign home buyers in real estate permit zones to submit financing plan

Apartment complexes in Seoul / Yonhap

The government will require foreign nationals buying homes in designated real estate permit zones starting early next year to submit detailed documents showing how they plan to finance their purchases, the land ministry said Tuesday.

The move, part of a revised government enforcement decree set to take effect Feb. 10, comes after concerns that some foreign buyers have been purchasing expensive homes with overseas funds that are hard to trace, without being subject to tightened domestic lending rules.

In August, the government designated most of Seoul, large parts of Gyeonggi Province and seven districts in the western port city of Incheon as land transaction permit zones for foreigners.

Foreign buyers in permit zones will be required to submit a financing plan and proof of how they secured the money, such as overseas loans, foreign bank deposits and names of foreign financial institutions involved in the home transaction.

The ministry said the measure will make it easier to identify illegal activities, such as tax evasion or unauthorized leasing, and help improve fairness in the government’s real estate taxation and oversight.