Korean Job Discussion Forums

[hokyong88]

Has anyone out there bought/sold an apartment? Advice needed, please.
Here's our situation. We found an apartment in Gyeonggi-do with a 220 Million Won asking price. We're willing to pay the 220Mil.. But, the owner and real estate agent say the owner paid 160Mil. last year and if they sell for 220Mil. { their asking price }, then they'll owe 45% tax since they only owned it for one year. They want to do a 'closed sale' recording a selling price of 160Mil. and getting 60 Mil. under the table from us unrecorded. They will not sell it to us legitimately for the 220Mil. they are asking. Well, 3 problems? 1. Isn't this illegal tax fraud and wouldn't we be breaking the law also? 2. If the 'recorded' price we pay is 160Mil., then when we sell, we'll get stuck for big taxes on the difference between 160Mil. and the 220Mil. we actually paid, so we get screwed. 3. We were also told that since I'm an F-4, not a Korean citizen, then our tax on selling would be considerably higher than for a Korean citizen. I thought an F-4 gave virtually all the rights of a Korean citizen. Any help or advice would be most welcome. Thanks, Hokyong88

[madoka]

Don't let them do it. There is no upside to falsifying your purchase. Let the seller know that you are an honest guy and do not want to do anything under the table.

[Mr. Pink]

I'd just walk away and look at buying another apartment if I was you. Anything with under the table cash is likely to get you into trouble.

[michaelambling]

[bassexpander]

Hell no. There are serious ramifications for you if you do this and get caught (quite likely, as the ultra-low price will likely draw an investigation).

Move on.

[Unposter]

First of all, if you are going to help them, you should get a discount on the price. For example, you could agree to pay them some of the price under the table but you want to only give them 50 million instead of 60 million.

I'm a little surprised you have to ask but yes, this is illegal but if this is the apartment you really want then...

As far as I know, and I am no expert, there are not two sets of taxes for real estate. You should pay the same amount of tax as anyone else. My understanding and you can take it for whatever it is worth, you are supposed to live in the apartment for five years otherwise you have to pay a surcharge on any capital gains from selling the property.

Yes, you would be on the hook for any capital gains when you sold the property (assuming there are some). You would either have to do the same thing he did or pay the taxes. Why don't you ask your real estate agent what the taxes would be.

Lastly, your best bet to get good information would be from professionals such as a real estate agent and not the good folks on Dave's. This goes for most other questions too. As a general advice to anyone who just happens to read this, asking for advice on this site, not related to teaching English is pretty sketchy.

[meangradin]

to answer the original question, NO you should not even contemplate this -especially as there is no benefit to you.

What I don't understand is why you are paying 60 million more for a property that should have decreased in value from last year. Correct me if I am wrong, but have not housing prices dropped from last year? I really don't think they could have increased 25% in that time.

[JongnoGuru]

Well, lookit all the little pearl-cluthers on this thread, gasping at the very notion of such goings-on, and at the OP for contemplating engaging in such chicanery. You just have no idea. You don't know how common, not to say Standard Operating Procedure (esp. in the 3 southern seoul districts under 'anti-speculation' lockdown) this sort of arrangement is here. I've had sellers propose it, I've proposed it myself, realtors and accountants have urged it, a government tax official, no less, has given me pointers and assurances on it. It's wrong and it's common.

[gmlkoreanna]

proceed with caution.. you will get hit with them taxes BIG TIME!!