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Korean IRS Aids Land Speculation Fight

Posted March. 23, 2006 03:03,   


The National Tax Service (NTS) will audit Pangyo apartment winners suspected of speculation activity, in addition to reconstructed apartment buyers in Seoul’s Gangnam area, it announced yesterday.

The audits are intended to inhibit real estate speculation and prevent real estate prices in nearby areas from going up.

Kwon Chun-ki, head of the NTS real estate taxation bureau, said yesterday, “When the 9,420 winners for Pangyo apartments are announced on May 4, we will start an investigation into the number of homes in their possession, their reported income, the number of real estate transactions they have made, and the possible use of corporate funds to buy the apartments. Those who are suspected of speculation will be audited, along with their families and related companies.”

The NTS has launched an investigation into some 2,232 real estate agencies around Pangyo and 697 other companies suspected of illegal real estate transactions.

In the course of inspection, if illegal transactions are found, or if evidence promoting illegal speculation is found, then it will notify the prosecution and local government. Those found to have been involved in illegal transactions would face cancellation of apartment contract and criminal punishment.

The investigation into reconstructed apartments in the Gangnam area has widened. In addition to 133 under investigation, 322 people suspected of speculation will undergo investigations over the next 40 days.

Those subjected to investigation are 153 people who acquired reconstructed apartment units in Seocho, Gangnam, Songpa and Gangdong-gu, 134 suspected of omitting their capital gains tax, and 35 real estate agents in the Gangnam area. An investigation is to be taken on them and their family members on real estate transactions since 2000 to verify possible tax omissions.

Keuk-In Bae bae2150@donga.com imsoo@donga.com