After making an offer on a property, a sales contract/agreement needs to be drawn up by a lawyer and signed by the buyer and seller. While it is not mandatory, the seller commonly asks for a deposit (usually 10% of the purchase price) at this time.
The exact conditions for how the payment will be made will be outlined in the contract, but it is usually separated into 2 or 3 transactions. If there are 3 or more payments, the sale cannot be cancelled after the second payment transfer is made.
Registering your property
The process for registering real estate in South Korea is split into two stages: land acquisition registration and transfer of ownership registration.
1. Foreigner’s Land Acquisition
As a foreigner, you are subject to the Foreigner's Land Acquisition Act and must get a Land Acquisition Report when you purchase property. To do this, you need to report your purchase to either the Si, Gun or Gu office (city, county or district office) in your area within 60 days of signing the sales contract. You will need to provide the following documents:
- signed sales contract
- your Alien Registration Card
- copy of the Land Register showing the name of the seller
If you wish to buy property that is built on a ‘protected area’, you need to get permission for the land acquisition from the Si, Gun or Gu office before signing the sales contract. Protected areas are classed as:
- areas where the military operates
- ecosystem conservation areas
- areas with cultural properties
If you do not get this permission before you agree on the contract, you can face a fine or even jail time.
2) Transfer of ownership
Within 60 days of paying the full property purchase price, you need to complete the property registration by registering the transfer of ownership at your local Si, Gun or Gu office. To do this, you will need to provide the following documents:
- your Alien Registration Card
- completed registration application
- documents certifying the reasons for registration (e.g. signed sales contract)
- Land Acquisition Report
- registration certificate
Registration for non-residents
If you are purchasing property in South Korea as a non-resident, the process of registration is very similar: you need to get a Land Acquisition Report and register the transfer of ownership. You will need to apply for a registration number at the immigration office before being able to register the transfer of ownership. You can do this by showing a copy of the Land Acquisition Report and your passport.
Foreign Exchange Transaction
As a non-resident, you are also subject to The Foreign Exchange Transactions Act. This means you need to report the transaction (of purchasing the property) to a foreign exchange bank. To do this you will need to submit a copy of the sales contract, a copy of the appraisal report and a copy of the property registration.
Estate agents and lawyers
It’s advisable to hire a local estate agent when buying property in South Korea. As well as being able to guide you through the purchasing process, they also have insurance that covers you in the case of fraud or problems with the title of the property. You should check an estate agent’s coverage limit (the amount of money you are covered for) before hiring him/her.
The process of registering your property can be complicated as there is a lot of property regulation in South Korea. It is wise to hire a lawyer to assist you. A lawyer is also required to draft the sales contract.