The pre-approval system for foreign residential real estate purchases has been fully implemented.

From August 26, 2025, the Ministry of Land, Infrastructure and Transport (hereinafter referred to as the “MOLIT”) will apply a tax exemption for foreigners purchasing residential real estate (including land) in some areas of the metropolitan area. prior approvalThe government introduced this system based on the judgment that the stability of the real estate market could be threatened as the number of foreigners purchasing residential real estate increased.

Foreigners purchasing a home in the Seoul metropolitan area must obtain prior approval and reside in the property for at least two years after purchase. This approval applies to residential properties such as apartments, single-family homes, multi-family homes, multi-unit dwellings, and townhouses.

 Applicable Area & Period

• Application period: August 26, 2025 - August 25, 2026
• Designated areas: All of Seoul (25 districts), 23 cities and counties in Gyeonggi Province, and 7 districts in Incheon Metropolitan City.

Applicable persons

• As 'foreigners, etc.', specifically including:
  • Individuals who do not hold Korean citizenship
  • A corporation or organization established under foreign laws
  • A corporation or organization in which an individual or foreign corporation without Korean citizenship holds more than half of the capital or voting rights

Permitted Transactions and Actual Residency Requirements

• When purchasing residential real estate within a residential land transaction permit zone → prior approval is required.
• City, county, or district approval must be obtained before signing a contract.
• The definition of residential use includes single-family homes, multi-family homes, apartments, townhouses, and multi-unit dwellings (see Appendix 1 of the Enforcement Decree of the Building Act). Officetels are excluded.
• Foreigners who receive a permit must move into the property within four months of the permit date and reside there for at least two years. (This means that gap investment, where a home is purchased using a jeonse deposit, is prohibited.)
• Procedure: Pre-approval → Sales contract with permission attached → Transaction report and registration → Move in and reside in the property for more than 2 years.

Sanctions for violation

If a transaction is conducted without a permit, the contract may be invalidated. If a violation is confirmed, the city, county, or district where the property is located may issue a three-month enforcement order. Failure to comply may result in repeated enforcement fines and the permit may be revoked.

Implications of the implementation of the system and its future impact

While restrictions on foreigners' access to residential real estate could potentially reduce demand in the market, it could create a relatively favorable environment for domestic buyers. The two-year residency requirement significantly limits short-term investment opportunities for profit.

For investors in redevelopment and reconstruction projects, it's essential to quickly determine whether a landowner is a foreigner, whether they can actually live there, and whether permits are available before acquiring a stake. This system will initially be implemented for one year, from August 26, 2025, to August 25, 2026, with the possibility of an extension being discussed.

If you are a foreigner planning to purchase residential real estate in Korea, we recommend that you understand the broad framework of these regulations and thoroughly review them in advance.