Tax Investigation on 153 Real Estate Agencies

National Tax Service (NTS) launched a special tax investigation on realtors that is suspected to stir up real estate fever.

Kim Mun-hwan, senior officer for Investigation 2 team disclosed at 11th “ NTS launched special tax investigation on 153 realtors that are suspected to stir up real estate fever by buying and selling real estates in prospective districts.”

In the morning of the day, NTS sent 228 investigators of head office and branch offices to the whole country to seize documents and others from the realtors.

The subjects to this investigation include 145 realtors, 3 selling agents and 5 real estate consultants.

According the geographical classification, there are 56 subjects in Kangnam of Seoul, and 27 subjects in other districts of Seoul. Additionally, there are 40 in Kyunggi/Inchun, 10 in Choongchung, 5 in Homan, 5 in Daegu, 6 in Busan 4 in Cheju, etc.

The main subject of this investigation includes companies involved in the transaction frequently in the districts of ▽the districts of Seoul metropolitan area where price jumping of apartments ▽new towns, economic special zones, international free cities

▽dissolution districts of green belt ▽rural resident districts ▽other real estate fevering districts ▽permission district for real estate transaction.

NTS will investigate ▽whether they conspired with money lender or speculators to stir up and avoid tax ▽whether they involve in short term transaction directly for speculation ▽whether they receive more than legal brokerage and avoid tax

Additionally NTS will investigate on financial trace to discover actual income. Since 1999, NTS has investigated the details of transaction, but will investigate for last 15 years’ transaction on habitual tax avoiders.

NTS explained that these companies are registered in other’s name to avoid a lot os amount of tax. In case of a Kim operating a real estate agency in Secho-gu of Seoul involved in transaction of redevelopment apartments for last 3 years and reported income by 900 million won less to NTS.

As NTS launched the investigation, lots of realtors closed the door and disappeared.

Jeong-Hun Park sunshade@donga.com