Gyeonggi Province Seizes Real Estate Pre-Sales Rights Worth 270 Billion Won from 505 Delinquent Taxpayers

[Suwon Ilbo=Reporter Park No-hun] # Mr. A, who failed to pay approximately 200 million won in enforcement fines, had delayed tax payments for years, claiming personal circumstances prevented him from paying taxes.

However, in Gyeonggi Province's comprehensive survey of pre-sales rights, he was found to have purchased three units in a new city officetels in the province (valued at approximately 2.3 billion won total) the previous year, leading to seizure of his assets.
Another delinquent taxpayer, Mr. B, also failed to pay approximately 200 million won in local taxes, but investigation revealed that he had received pre-sales rights for an apartment worth 800 million won in a new city area in Incheon the previous year.

Following a comprehensive investigation of nationwide real estate transaction status from 2020 to May 2021 conducted by Gyeonggi Province targeting delinquent taxpayers with 500,000 won or more in off-budget revenue and local tax arrears, the province confirmed and seized 570 pre-sales rights (occupancy rights) held by 505 individuals.

The 570 pre-sales rights transactions totaled 270 billion won, which amounts to 100 times the 2.7 billion won in unpaid tax arrears by the delinquent taxpayers.

Unlike real estate ownership, pre-sales rights (occupancy rights) lack a public announcement system, making it difficult to detect transactions and leaving them previously in a blind spot for tax delinquency enforcement.

Accordingly, the province inquired about acquired pre-sales rights (occupancy rights) through the Korea Real Estate Board's real estate transaction reporting information.

Under the current Real Estate Transaction Reporting Act, when a real estate transaction contract is concluded, the actual transaction price must be reported within 30 days, and this includes transactions involving rights to acquire real estate (pre-sales rights and occupancy rights).

Kim Min-kyung, head of the Tax Justice Division at Gyeonggi Province, said, "In Gyeonggi Province, there is no longer a haven for tax evasion," and added, "We will continue to collect unpaid taxes from delinquent taxpayers who attempt to evade their tax obligations through pre-sales rights seizures and other measures to ensure fair taxation is established."