South Korea tax authority uncovers 73.1 bn won evasion via false property transfers

The National Tax Service (NTS) identified a scheme in which a taxpayer who owned two apartments transferred a low‑priced unit to a relative’s acquaintance and then sold a high‑priced unit for 2 billion won, claiming the 1‑household capital‑gain tax exemption. The seller continued to live in the low‑priced apartment and paid the acquaintance’s acquisition and property taxes, receiving monthly payments as a reward.

The NTS classified the arrangement as an illegal dummy‑sale, ordered a 1 billion‑won capital‑gains tax surcharge, and referred the taxpayer, the intermediary and the relative’s acquaintance to prosecutors for tax evasion. The agency’s broader investigation of similar cases has so far uncovered 731 billion won in avoided taxes across more than 40 instances, with 318 billion won already collected. Prosecutors have charged six individuals, while others face fines of up to 700 million won and notifications to local governments.

The NTS warned that, as multi‑homeownership reforms tighten, it will intensify scrutiny of sham transfers, family‑gift loopholes and overseas‑entity transactions to prevent future abuse.