Government tightens foreign property purchases to stabilize market

The South Korean government announced new restrictions on foreign land purchases, designating most areas of Seoul and parts of Gyeonggi and Incheon as foreign land transaction permission zones. Foreigners in these areas must obtain approval from local authorities to buy land and must reside there for at least two years. While some regions have previously restricted foreigners' land purchases for national security reasons, this is the first time such rules have been introduced to stabilize the real estate market.

Foreigners who receive approval to purchase property must move in within four months and reside there for at least two years. Violations may result in a penalty of up to 10% of the acquisition price.

After receiving approval and signing a contract, foreigners must submit a funding plan and supporting documents within 30 days. Currently, this requirement applies only in speculative overheating zones, regardless of nationality. The funding plan must include the amount of overseas loans, the names of financial institutions, the sources of funds, and the type of visa held.

The government said it may consider extending the designation period depending on market conditions. “Foreign purchases of homes without actual residence are increasing, particularly in the Seoul metropolitan area," said Lee Sang-kyung, first vice minister of the Ministry of Land, Infrastructure and Transport. “We will fundamentally prevent market disruption by foreigners.”


윤명진기자 mjlight@donga.com