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Tax agency to probe buyers of expensive homes over alleged tax evasion

All News 14:29 December 23, 2019

SEJONG, Dec. 23 (Yonhap) -- South Korea's tax agency said Monday that it will launch an investigation into buyers of expensive homes over alleged tax evasion, a week after the government unveiled tougher regulations to rein rising home prices.

The National Tax Service (NTS) said it will start the probe into 257 people who are suspected of evading taxes or illegitimately raising money to buy homes.

Debt accounted 69 percent of 512.4 billion won (US$440 million) spent in 531 home transactions, which have been under scrutiny by the NTS, the tax agency said.

For instance, a 20-something person, who recently purchased three homes, is suspected of illegally receiving money from his or her mother who runs a property business, the NTS said.

Tax agency to probe buyers of expensive homes over alleged tax evasion - 1

In the toughest steps ever to cool housing prices in Seoul and its neighboring areas, mortgage loans have been banned when buying a house worth over 1.5 billion won in "speculative" and "overheated speculative" areas since last Tuesday.

The loan-to-value ratio for the purchase of a home valued from 900 million won to 1.5 billion won will be cut to 20 percent from the current 40 percent, officials said.

The speculative areas include four districts in Gangnam and 11 districts in northern Seoul. Seoul's 25 wards and four wards in Gyeonggi Province are designated as overheated speculative areas.

Housing prices have been on the rise in recent years, spurring policymakers to roll out a series of measures, including tightened home-backed loan regulations and hefty taxation, to cool down home prices.

But a supply shortage in Seoul and adjacent areas and low borrowing costs have continued to drive up demand for new apartments, while prodding builders to scramble to demolish aged apartments on hopes for hefty gains after rebuilding.


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