Effective August 21, 2025, the South Korean government introduced a new permit-based regime restricting residential property purchases by foreigners in key regions, including all of Seoul, extensive parts of Gyeonggi Province, and specified districts in Incheon. IPG Legal will update the reader when more information becomes available. For additional articles on Korean Real Estate Law, please see: IPG Legal’s Real Estate Law Archive.

IPG Legal is engaged by expatriates, family offices, and foreign capital-invested companies on matters related to financing and the acquisition of residential and commercial properties in Korea.

Key Provisions of the New Regulation on Non-Korean Purchasing Real Estate in Korea

1. Approval Requirement for Foreigners to Purchase Real Estate in Designated Areas in Korea
   Foreign individuals, corporations, and government entities are now required to obtain approval from the relevant local government authority before acquiring residential real estate. This marks a departure from the regulations that opened the real estate market to foreigners following the Asian Currency Crisis.
2. Residency & Occupancy Conditions
   • Foreign Buyers must occupy the property within four months of the purchase date.
   • Foreign Buyers must maintain residency for at least two consecutive years.
3. Transaction Reporting and Financing Disclosure
   • If foreign funding is involved, buyers must report and submit a financing plan within 30 days of contract signing.
   • Required details include the overseas financial institution, the amount sourced abroad, and the buyer’s visa status.
4. Penalties for Non‑Compliance
   • Failure to adhere to occupancy requirements or approval obligations may result in fines of up to 10% of the property’s value and contract nullification.
   • We shall update the readers on enforcement actions when more is known.

Practical Legal Guidance

Consideration	Action / Advisory
Permit Process	Be aware of significant financial penalties and the possibility of contract nullification in cases of non-compliance. Therefore, consult with an attorney during the purchase process.
Residency Requirements	Plan to occupy the property immediately and ensure continuous residency for two years.
Funding Disclosure	Prepare comprehensive documentation on financing, especially for funds transferred from overseas. Document everything, including all wire transfers and all financing documentation.
Penalties & Risks	Monitor evolving legislation (e.g., capital restrictions, reciprocity clauses) for future implications. We will update the reader when more information becomes available.
Regulatory Vigilance	Monitor evolving legislation (e.g., capital restrictions, reciprocity clauses) for future implications. We shall update the reader when more is known.

by Sean Hayes

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as a Top Attorney by AsiaLaw, and IPG Legal is consistently ranked Top Dispute Resolution Law Firm for our litigation services.

If you would like a consultation with Sean Hayes from IPG Legal, please schedule a call at:  Schedule a Call with Attorney Sean Hayes. 

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