10/04/2007

Foreigner Purchasing Property

Foreigner Purchasing Property
Korea Times by Sean Hayes

Dear Sean Hayes: I was informed that there are limitations on foreigners purchasing property in Korea. I would like to purchase an apartment and was wondering what restrictions are on foreigners in purchasing property in Korea. What does a foreigner need to do to purchase property in Korea and is it true that foreigners need advance permission from the government to purchase property?

Renter in Itaewon.

Dear Renter: In 1998 Korea liberalized many of its laws concerning foreigners, including the Foreigners' Land Acquisition Act. Many further liberalizations also occurred under the present administration.

The changes in the treatment of foreigners were a direct reaction to the financial crisis that hit Korea and most of the rest of Asia. Many of the changes were recommendations by the International Monetary Fund (IMF). Specifically, before the change in the Foreigners’ Land Acquisition Act, foreigners were strictly limited in their ability to acquire property and few foreigners obtained, or even attempted to obtain, permission from the government.

Today the situation has drastically changed. Foreign nationals and foreign corporations have significantly increased their investments in the real estate market. Foreign companies have owned or presently own many of the major architectural landmarks in Korea including Star Tower, the Seoul Finance Center, Daewoo Securities Building, SKC Building, and the Citibank Building.

At least partially because of investment by foreigners, prices of office buildings have drastically increased, since 1998. In the past, transactions in large office buildings were dominated by chaebol.

Today, chaebol compete in the market with foreign investment funds and foreign corporations. The increased competition is at least part of the reason for the increase in the value of office buildings. The law treats all foreigners, whether corporations or individuals, similarly to Korean corporations and individuals.

A foreigner who resides in Korea can purchase a residence. You must register the transaction within 60 days of the purchase of the residence at a city, county, or ward office located in the district of the residence. When you go to the office bring the land contract, a transcript of the Land Register showing the name of the transferor, and also your alien registration card.

If you don't speak Korean it will be beneficial to bring a Korean-speaking friend. The law treats foreigners similarly, but not the same as Koreans. Foreigners are still unable to purchase cultural properties, ecological reservations, certain agricultural properties, and other specially protected properties.

Additionally, if a foreigner does not reside in Korea, different filing requirements need to be met, but the process is also fairly straightforward. It is advisable to purchase the property through a reputable real estate agent, since a reputable agent will be able to file and guide you through the process.

Make sure the agent is a licensed real estate agent and has previously handled transactions concerning foreigners.

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SeanHayes@ipglegal.com