Family 'Chances' Fund 2.6 Trillion Won in Seoul Home Buys, Bolstering Wealth Inheritance

The practice of wealth inheritance in South Korea is intensifying, with 'family chances' – gifts, inheritances, and loans from relatives – playing an increasingly significant role in funding home purchases, particularly in Seoul.

“

In the first quarter, 'family chance' funds including gifts, inheritances, and loans used for Seoul home purchases reached 2.6 trillion won.

In the first quarter of this year, funds sourced from family contributions amounted to 2.633 trillion won for Seoul home purchases. This represents a substantial 63.9% increase compared to the same period last year, pushing the proportion of such funds in total transaction costs from 5.7% to 11%.

A notable trend is the dramatic rise in 'other loans,' which primarily refers to funds borrowed from parents or other family members. These loans more than doubled in the first quarter compared to the previous year, while gifts and inheritances saw a more moderate increase of 42.9%. This surge in loans is often seen as a way to bypass gift taxes, as they can be structured to appear as legitimate debt.

“

Funds from 'other loans' between family members more than doubled in one year.

The data indicates that 30-somethings are the main recipients of these 'family chances,' accounting for 51.9% of the total family-sourced funds used for home purchases in the first quarter. Those in their 40s followed, making up 23.9%.

“

The 30s age group accounted for 51.9% of the total 'family chance' funds in the first quarter.

Experts point out that as loan regulations tighten, borrowing from financial institutions becomes more difficult, leading more individuals to rely on family support. The article notes that strategies for structuring these loans to avoid tax scrutiny are widely shared online. This growing reliance on inherited wealth raises concerns about fairness and the potential for entrenched class structures, as access to housing becomes increasingly dependent on familial financial backing rather than individual earning capacity.

“

As loan regulations have tightened, inquiries about borrowing money from parents in the form of loans have increased.