NTS Commissioner Warns of Crackdown on 'Fraudulent Gifting' of Homes

The Hankyoreh is reporting on a stern warning issued by National Tax Service (NTS) Commissioner Lim Kwang-hyun regarding the potential for 'fraudulent gifting' of multiple homes. As the deadline for a temporary tax relief measure on property sales looms, there is an expectation that more homeowners, particularly those with multiple properties, might opt for gifting to avoid capital gains taxes.

Commissioner Lim highlighted a significant surge in home gifting in Seoul during the first quarter of 2026, with a staggering 94.4% increase compared to the previous year. This trend has raised alarms within the NTS about individuals attempting to circumvent taxes through illegitimate means. While acknowledging that legitimate gifts should be respected, Lim emphasized the NTS's commitment to scrutinizing transactions that appear to be tax avoidance schemes.

To illustrate the potential tax implications, Lim presented a simulation comparing the tax burden of selling versus gifting a 3 billion won apartment in Seoul. The simulation suggested that selling the property before the May 9 deadline would result in approximately 650 million won in taxes on a 2 billion won capital gain. In contrast, gifting the property could incur taxes as high as 1.38 billion won, more than double the amount for selling. Lim questioned whether individuals are truly paying these higher gift taxes, implying that many might be engaging in fraudulent practices.

The NTS plans to conduct a comprehensive verification of all such transactions. Commissioner Lim specifically pointed to problematic scenarios, such as parents repaying loans on gifted properties or undervaluing high-priced apartments during the gifting process. He stressed the importance of tax justice and assured that the NTS would provide guidance and consultations to taxpayers to ensure they make informed decisions before the deadline. From our perspective at The Hankyoreh, this crackdown is crucial to maintaining fairness in the tax system and preventing the wealthy from exploiting loopholes at the expense of ordinary citizens.