[Korean Law Insights] Regulations on Real Estate Acquisition in Korea
- K-Law Consulting_Administration
- Sep 3
- 3 min read
Updated: Sep 25
[Published on September 2, 2025 edition of the "Korean Law Insights" column in the Korea Daily’s Economic Expert Section]
- Residential land transactions in Seoul and the metropolitan area
- Prior approval required and a minimum two-year residence obligation
Starting August 26, 2025, for a period of one year, foreigners who wish to purchase residential real estate in Seoul and certain metropolitan areas must first obtain prior approval.
With the enforcement of the Ministry of Land, Infrastructure and Transport’s newly designated “Foreign Land Transaction Permit Zones”, foreign nationals—including U.S. citizens—can no longer acquire residential property in Seoul simply by entering into a contract and filing the standard foreign acquisition report.
According to the authorities, the entire city of Seoul, 7 districts in Incheon, and 23 cities and counties in Gyeonggi Province have been designated as foreign land transaction permit zones.
The term “foreigner” covers all individuals without Korean nationality, foreign corporations or organizations, and foreign governments. For Korean-Americans, those who have obtained U.S. citizenship are subject to the restrictions, while permanent residents or those who have restored Korean nationality are exempt. Residential properties covered by the regulation include single-family homes, multi-family houses, apartments, townhouses, and multiplex housing with a floor area of at least 6㎡, but studios (오피스텔) are excluded.
The core of the new regulation is the residency requirement. Buyers must move in within four months of approval and reside for at least two years. Purchases made purely for investment or rental purposes are unlikely to be approved.
Compliance will be verified through electricity, water, and gas usage records, as well as on-site inspections. Violations may result in corrective orders, recurring fines of up to 10% of the purchase price, and even cancellation of the permit.
Another critical element is the funding plan and supporting documentation. While Seoul has already required this as a “speculative zone,” the new permit regime now adds stricter scrutiny. Proof of overseas remittances, loan agreements, and bank balance certificates will be thoroughly examined.
Short-term residents may face disadvantages in the review process, making it essential to demonstrate long-term visa status or stable living arrangements in Korea.
To strengthen oversight of foreign funds, the funding plan must now also disclose the purchaser’s overseas capital sources and visa type, and investigations into foreign housing transactions will be intensified.
If the authorities suspect that a housing transaction involving foreign capital inflows is linked to money laundering, the case may be reported to Korea’s Financial Intelligence Unit (FIU) and shared with foreign FIUs.
In addition, if a transaction appears to require taxation of capital gains by overseas tax authorities, the information may be forwarded abroad.
The process involves six steps:
Specify the purpose of purchase and source of funds
Apply for approval
Permit review and approval
Execute the official contract with the permit attached and file the transaction within 30 days
Pay acquisition tax and complete registration
Move in and fulfill the residency requirement
Any contract concluded without prior approval is void and may lead to legal disputes.
The government explains that these regulations are intended to address instability in the real estate market caused by indiscriminate property purchases by foreigners.
However, the residency obligation, complex procedures, and rigorous financial reviews may also pose high barriers for foreigners who genuinely wish to live in Korea.
The Korean government has indicated that the regulation may be extended beyond the initial one-year period.
Therefore, from now on, any foreign national seeking to purchase residential property in Seoul or parts of the metropolitan area must be fully aware of these regulations and procedures, and prepare accordingly.
▶Inquiries: (424)218-6562
Jin Hee Lee/K-Law Consulting Korean Attorney
[Reference link in original Korean]
