Around the world, speculative real estate purchases by foreigners cause an increase in a country’s real estate market, and are becoming a serious social issue as they lower the quality of life for people living in the country.

According to the Korea Appraisal Board, the number of land transactions by foreigners has continued to rise annually to a record high of 26,062 in 2018 and then 23,506 in 2019. This year, 19,605 land transactions have been recorded until September, and their monthly average has already caught up with the transaction volume of 2018.

While it is easier for foreigners to mobilize money relatively freely from tax policies than Korean nationals, they can acquire real estate in the same procedure as Korean nationals except for a certain reporting procedure, which calls for regulations to discourage speculative real estate acquisitions by foreigners.

Other countries like Singapore, Hong Kong, Canada, Australia, and New Zealand have introduced acquisition taxes, speculation taxes, or real estate transaction permission to discourage real estate speculation by foreigners.

Recently, Gyeonggi-do designated 23 cities and guns including Suwon as land transaction permission areas for foreign individuals or entities in an effort to discourage speculative demand.

In this regard, this Act aims to discourage speculative demand by foreigners and promote stability in the domestic real estate market by requiring foreigners to obtain permission for land acquisition from the authority to which they report in the event they intend to sign a deal that would acquire land in any high-speculation area under Article 63 paragraph 1 of the Housing Act or any area subject to adjustment under Article 63-2 paragraph 1 of the same Act (Article 9 paragraph 1 subparagraph 5 newly inserted).

Article 9