The government said Thursday it will impose restrictions on housing purchases by foreigners in Seoul, Incheon and major parts of Gyeonggi Province in an effort to block speculative demand fueled by overseas capital inflows.
The Ministry of Land, Infrastructure and Transport said the measure to place foreign home buyers subject to the Real Estate Transaction Reporting Act was approved at a meeting of the Central Urban Planning Committee earlier in the day.
The measure will take effect Tuesday and remain in place for one year, with a possible extension depending on market conditions.
Under the Real Estate Transaction Reporting Act, foreigners, foreign corporations and foreign governments require approval from local authorities before completing housing transactions in designated zones.
The measure covers all of Seoul, seven districts in Incheon and 23 cities and counties in Gyeonggi Province. Deals made without prior approval will be deemed invalid.
Further, approved buyers must move into the property within four months of receiving permission and reside there for at least two years.
Should they fail to comply, local authorities may issue corrective orders within three months, and repeated fines will be imposed until compliance.
When a deal is suspected to involve foreign capital inflows linked to money laundering, the case will be reported to the Financial Intelligence Unit, an agency tasked with tracking unlawful financial activities under the Financial Services Commission.
"The measure aims to block speculative demand fueled by foreign capital inflows and stabilize housing prices by preventing market disruption by foreign buyers," said First Vice Land Minister Lee Sang-kyeong.
According to ministry data, housing transactions by foreigners have risen steadily since 2022, with an average annual growth rate of more than 26 percent.
The government said the upward trend is expected to continue throughout the year, raising concerns about speculative buying amid tightened domestic loan regulations. (Yonhap)
