Overseas property investors from Korea on the rise

The Ministry of Finance and Economy on Tuesday said Koreans spent US$581 million buying 1,387 overseas properties in the first half, topping last year’s $514 million on 1,268 properties. The rise in spending began in February, when the Korean government tripled the ceiling for individual spending on overseas investment properties to $3 million. Since last March, there has been no limit on overseas property for residential purposes.

The number of individual investors who buy overseas real estate for business purpose is surging. Koreans have spent $150 million for business purpose, such as property lease and rental, seven times more than the same period last year.

Small and medium-sized enterprises invested $980 million in overseas properties, up 54 percent from the same period a year ago. Ministry official Song In-chang explained the increase happened because a growing number of asset management companies that buy overseas properties for lease and rental business are categorized as SMEs.

However, an official with the National Tax Service said while there is no tax for people who buy overseas properties in Korea, they will be taxed here if they earn money from leasing or transacting overseas properties. “Many overseas property investors do not know this tax system very well,” he said.

Courtesy: ChoSun

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