Close Investigation on Those Suspected of Property Speculation

The government will embark on a large-scale investigation on those suspected of property speculation, thereby dealing another blow to the real estate market.

As the housing market shows signs of stabilization, the Ministry of Construction and Transportation announced Jan. 6 that it decided to investigate on those charged with property speculation throughout the nation in order to prevent cash from flowing into the land market in advance.

To that end, the ministry is planning to get to the bottom of the present situation of land transactions throughout the country until July 12 last year, and set a standard for the areas subject to the investigation and suspects of speculation.

In addition, for those charged with the speculation, it decided to make a scrutiny into whether they had intention of speculation, by utilizing the resident registration database as well as the property database of the Ministry of Government Administration and Home Affairs(MOGAHA).

Lee Jae-Young, director of Land Policy Division of the ministry said, “We`ve been collecting the information of land transactions through the local government. We`ll be able to hand over the list of the suspects of speculation to the National Tax Service (NTS) by the mid February.”

The Ministry of Construction and Transportation had requested the NTS twice in September and October last year to investigate 33,000 suspects who either bought and sold land more than twice in the metropolitan area, Cheju island and Asan new town or transacted a large area of land.

The NTS has finished the first investigation on the suspects and a secret investigation is in under way targeting the most likely suspects.

“The announcement of the final result comes out somewhat late as there are too many suspects and we have to make a close investigation on the individuals,” said Lee Ju-Seok, Assistant Commissioner For Investigation Bureau. He also made clear that when the Ministry of construction and Transportation informs the NTS of a new list of suspects, it will investigate them apart from the previous suspects.

Different from this investigation, the NTS also decided to report the Presidential Transition Committee (PTC) a countermeasure against property speculation that would make a strict investigation on construction firms which raised the property price of proposed sites of development, vicinities of such sites, and apartments.

Jae-Seong Hwang Jin-Hup Song jsonhng@donga.com jinhup@donga.com