On August 26, 2025, Korea implemented new regulations on real estate transactions by foreign nationals in the Seoul metropolitan area and its surrounding regions. The policy requires buyers to obtain approval from local authorities and meet mandatory residency conditions. Its objective is to curb speculative investment and stabilize the real estate market.
Summary
I. Legal basis
- Ministry of Land, Infrastructure and Transport – MOLIT
- Real Estate Transaction and Land Act – RETLA
- National Land Planning and Utilization Act – NLPUA
II. New policy
According to the announcement by the Ministry of Land, Infrastructure and Transport of Korea on August 26, 2025, foreign individuals and entities wishing to purchase real estate (including apartments, detached houses, townhouses, and villas) in the Seoul metropolitan area, 23 cities and districts in Gyeonggi Province, and 7 districts in Incheon must obtain approval from local authorities before signing a sales contract. In addition, buyers are required to move into the property within four months of purchase and maintain continuous residence for at least two years. Violation of these regulations may result in a fine of up to 10% of the property’s value, and the sales contract may be revoked.
In cases where a transaction is conducted without the required permit, the entire contract may be rendered null and void. If the transaction is suspected of being linked to money laundering, the authorities will report it to the relevant foreign Financial Intelligence Unit (FIU) for coordinated investigation.
III. Objectives of the new policy
The Korean government believes that the implementation of these new regulations is necessary to prevent speculative foreign capital inflows and to stabilize housing prices, particularly in high-value areas such as Gangnam and Hannam. In addition, the policy aims to protect local residents’ housing rights and ensure the sustainable development of the real estate market. Previously, many foreign investors had taken advantage of loopholes in lending regulations to purchase high-end properties, contributing to a sharp rise in housing prices and placing significant pressure on the housing affordability of Korean citizens.
IV. Market trends before policy implementation
Foreign property transactions in the Seoul metropolitan area have surged from 4,568 in 2022 to 7,296 in 2024, representing annual growth exceeding 26%. Through July 2025, foreigners completed 4,431 residential purchases, placing the year on track to surpass 7,600 transactions.
Foreign buyers utilizing Korea’s property manager system have drawn particular attention from regulators. Since August 2023, foreign buyers have purchased 497 residential properties in the capital region through this mechanism, with US nationals accounting for more than 60% of transactions and Chinese nationals representing approximately 22%.
Chinese citizens own 56,301 residential units nationwide, leading all foreign nationalities, followed by Americans with 22,031 properties, Canadians with 6,315, and Taiwanese with 3,360 units according to government data.
Authorities predict that this trend will continue to rise through the end of the year, raising concerns about real estate speculation amid increasingly tightened domestic lending regulations.
V. Conditions for foreigners to purchase real estate in Korea
Foreigners who wish to own real estate in the Seoul metropolitan area, including 23 cities and districts in Gyeonggi Province and 7 districts in Incheon, must meet the following conditions:
- Obtain approval from the local government before completing the transaction.
- Move into the property within 4 months from the date of purchase.
- Maintain continuous residence for at least 2 years.
- Violations may result in fines of up to 10% of the property’s value, and the contract may be nullified.
VI. Conclusion
The new Korean regulations mark the first time the government has imposed restrictions on foreign ownership of real estate with the goal of stabilizing the market, rather than solely for national security purposes as in the past. This policy reflects the Korean government’s determination to control speculative capital flows, protect local residents’ housing rights, and promote a healthy and sustainable real estate market.
The one-year trial period (until August 2026) will serve as a timeframe for authorities to assess the actual impact of the policy on the market. Based on the results, the Korean government may extend or revise the regulations to achieve a balance between attracting legitimate foreign investment and maintaining domestic economic and social stability.
VII. About NYLA – Korean Legal Office
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