NTS targets young homeowners for suspected tax evasion

National Tax Service Assistant Commissioner for Property Taxation Rho Jeong-seok speaks at a briefing at the Sejong Government Complex Tuesday. Courtesy of NTS

By Lee Kyung-min

The National Tax Service (NTS) is investigating 224 people over suspicions they received money from their parents without paying the proper taxes or bought high-priced apartments in affluent areas despite their clear lack of funds, the agency said Tuesday.

Many of them ― aged under 30 ― are suspected of violating the transfer tax law, under which only up to 50 million won ($43,000) given by parents over a 10-year period can be exempted from tax. The limit is 20 million won for those under 18.

The tax agency believes many have flats, widely known in Korea as officetels, or apartments in the affluent southern Gangnam area of Seoul because their parents bought them.

Other areas with overheating housing markets include three “anti-speculative” zones ― Mapo, Yongsang and Seongdong in Seoul.

“The investigation will include not only homeowners but their parents and relatives to identify the source of the money,” NTS Assistant Commissioner for Property Taxation Rho Jeong-seok said at a briefing at the Sejong Government Complex Tuesday. “The scope will be further expanded to look into whether the money used in buying the property came from corporate funds.”

The tax agency narrowed down those subject to investigation based on data provided by the National Science and Technology Information Service (NTIS), the Financial Intelligence Unit (KoFIU) and the Ministry of Land, Infrastructure and Transport.

The data includes financial assets, income and consumption records, including credit card spending.

The NTS is required to receive regular transaction records from the land ministry, which collects data on owners of property worth more than 300 million won.

The tax agency's latest move is a continuation of previous similar efforts.

A total of 439.8 billion won was levied on 2,228 people investigated between August 2017 and November 2018.

The amount was set after the NTS identified their tax evasion attempts, including drafting home purchase documents with falsified prices and illegally trading homes before they were built.