Buyers of expensive homes face probe over alleged tax evasion

SEJONG -- South Korea's tax agency said Thursday that it will launch an investigation into buyers of expensive homes over alleged tax evasion.

The National Tax Service said it will start the probe into 361 people who are suspected of evading taxes or illegitimately raising money to buy homes.

For instance, a 30-something person, who recently purchased a home in Seoul's affluent Gangnam district, is suspected of illegally receiving money from his or her mother.

In the toughest steps ever to cool housing prices in Seoul and its neighboring areas, mortgage loans have been banned for purchases of homes worth over 1.5 billion won in areas designated as "speculative" and "overheated speculative" since last December.

The loan-to-value ratio for the purchase of a home valued from 900 million won to 1.5 billion won was cut to 20 percent from the current 40 percent.

Housing prices have been on the rise in recent years, spurring policymakers to roll out a series of measures, including tightened home-backed loan regulations and hefty taxation, to cool down home prices.

But a supply shortage in Seoul and adjacent areas and low borrowing costs have continued to push up housing prices, while prodding builders to scramble to demolish aged apartments on hopes for hefty profits after rebuilding. (Yonhap)