November 27, 2024

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Aerial view of apartment complexes surrounding Lotte World Tower in eastern Seoul. (Lim Se-jun/The Korea Herald)

Foreigners seeking to make real estate investments in South Korea are now obligated to hire a local entrusted manager if they don’t have a permanent residential address here, officials said Tuesday.

Foreign investors who have resided in Korea for more than 90 days -- considered long-term residents -- must also submit detailed documents backing up their home address here.

The latest changes in the nation’s real estate laws are part of the Ministry of Land, Infrastructure and Transport’s bid to weed out speculative property investment by foreign investors.

"South Korea does not ban foreigners from investing in the local real estate market," a Land Ministry official told The Korea Herald on the condition of anonymity.

"The change was made for the government to better acquire data on foreign investment (in Korea)," the official added.

The official explained that prior to the latest update, long-term residents weren't obligated to submit documents to prove their home address in Korea.

"It's an effort to reduce the gap between local and foreign investors. It is easier for the government to cross check whether the foreign investor submitted a real address under the new law."

The ministry also said it “established grounds” to obtain certificates proving the foreign investor’s departure from and entry into Korea, as well as health insurance documents from the relevant authorities.

The ministry said that it had faced difficulties in investigating foreigners’ speculative property investments in October last year due to “unresponsive” investors. Such investors had registered “unclear” addresses in the government system, leading to the authorities’ failure to contact them.

Last year, a total of 81,626 foreigners owned residential properties in South Korea, Land Ministry data showed earlier this year. It marked the first record of government compiled data on foreigners’ real estate investments in the country.

The properties owned by foreigners accounted for 0.4 percent of all homes in Korea.

“The latest changes are expected to bring about effective ways to investigate and deal with disruptive investments in the local real estate market,” Nam Young-woo, director general of the Land Policy Bureau at the Land Ministry said in a statement.

Chinese nationals accounted for more than half or 58.7 percent of foreign investors. US nationals took up 21.9 percent followed by Canadians with 6 percent. Taiwanese nationals stood at 3.7 percent and Australians came to 1.8 percent.

By Jung Min-kyung (mkjung@heraldcorp.com)