A Foreign Buyer’s Journey in South Korea’s Real Estate Market

Published on January 14, 2026 and written by Cyril Jarnias

Buying real estate on the other side of the world is rarely smooth sailing. In South Korea, the framework is both open and highly regulated: foreigners can acquire apartments, houses, or offices almost like local nationals, but must navigate specific laws, demanding banking procedures, and—recently—new restrictions in the Seoul metropolitan area.

An Open Market… But Increasingly Regulated

The first thing to know is simple: a foreigner, whether an individual or a company, is allowed to buy real estate in South Korea, including land. Ownership rights are close to those of a Korean citizen: it is possible to resell, rent, or develop the property, provided local laws (zoning, tenancy, taxation, etc.) are respected.

As a rule, there is no minimum investment threshold for buying a home and no list of banned nationalities. It is also not required to live on-site or even hold a specific visa to become an owner. However, owning property does not automatically grant a right of residence: residency and citizenship follow other procedures, sometimes linked to investment but always distinct from the purchase itself.

New Rules in the Seoul Metropolitan Area

A major shift occurred with the introduction of a prior authorization system for residential purchases by foreigners in the Seoul metropolitan area. This reform, intended for one year but extendable, marks the first time the Korean government has explicitly invoked real estate market stabilization—not national security—to restrict foreign acquisitions.

In Seoul’s 25 districts, in many cities in Gyeonggi Province, and in several districts of Incheon, a foreigner wishing to buy a home must now:

– obtain a permit from the local community before signing the final contract,

– move into the home within four months of purchase,

– reside there for at least two consecutive years.

Resident, Non-Resident, Company: Statuses That Change Everything

Behind these principles lies a mound of procedures, the complexity of which varies according to the buyer’s profile:

– the foreign resident (holder of a registration card and living in Korea) follows a path close to that of a Korean citizen;

– the non-resident must additionally manage foreign exchange regulations, file a bank notification for fund transfers, and obtain a specific real estate registration number;

– the foreign-invested company is also subject to the Foreign Investment Promotion Act, requiring an investment declaration, company registration, etc.

In all cases, it is registration in the land register that legally establishes ownership: a signed contract and full payment are not enough if registration is not completed.

Where to Buy? Geography, Prices, and Potential

The South Korean market is highly urban, driven by an advanced technological and industrial economy, a demography heavily concentrated in large cities, and a structural land shortage in central areas. Location choices have a direct impact on profitability, liquidity, and, for some investors, on eligibility for a residence visa.

Major Cities and Prime Areas

Here is a simplified overview of some key markets, with approximate price ranges per square meter based on available data.

City / Zone	Market Profile	Estimated Price Range (KRW / m²)
Seoul	Capital, high demand, land scarcity	10,000,000 – 50,000,000
Busan	Major port city, coastline	7,000,000 – 30,000,000
Incheon (Songdo, etc.)	Port city, smart city, airport	6,000,000 – 25,000,000
Daegu	Industrial city, more affordable market	5,000,000 – 20,000,000
Jeju Island	Tourist destination, villas, resorts	5,000,000 – 30,000,000
Gyeonggi (Suwon, Seongnam…)	Seoul’s commuter belt, cheaper alternatives	4,000,000 – 15,000,000

In Seoul, neighborhoods like Gangnam, Itaewon, or Jongno attract most international attention, with sometimes spectacular high-end transactions: for example, an American bought a 240 m² apartment in Hannam for 12 billion won, while another foreign buyer paid 18 billion won in cash in the Yongsan district.

Finally, Jeju combines volcanic landscapes, a supply of tourist residences, and specific visa schemes, making it a frequent target for “lifestyle”-oriented investors.

Special Rules in Certain Tourist Areas

For those targeting real estate as a residency lever, there is a separate system: the Immigrant Investor Scheme for Real Estate (IISRE). It imposes minimum investment amounts in predefined zones and property types (tourist residences, resorts, leisure condos, etc.).

Region / Designated Project	Eligible Property Types	Announced Investment Threshold (KRW)
Incheon (Songdo, Cheongna, Yeongjongdo)	Residences, tourist condos, pensions	≥ 1,000,000,000
Busan (Haeundae, Dongbusan Tourist Complex)	Leisure condos, tourist residences	≥ 1,000,000,000
Gangwon (Pyeongchang Alpensia, Jeongdongjin)	Resorts, leisure villas	700,000,000 – 1,000,000,000
Jeollanam‑do (Yeosu, maritime complexes)	Tourist complexes, condos, pensions	700,000,000 – 1,000,000,000
Jeju Island (certain projects)	Resorts, tourist villas	starting from 1,000,000,000 (variable data)

Only properties within these precise perimeters and types can qualify for a residence investor visa, which implies heightened due diligence on the project’s actual eligibility.

Key Steps for a Foreigner’s Purchase

Beyond regional specifics, the process follows a fairly stable general framework. The key difference lies in residency status and the source of funds.

1. Property Search and Initial Screening

Prospecting today relies heavily on online platforms (Naver Real Estate, Dabang, Zigbang, etc.), supplemented by physical agencies – the famous 부동산 (budongsan) – and more international firms like Savills Korea, CBRE, JLL, or agencies specialized in expatriate clients.

For a foreigner, the difficulty is not just finding an attractive listing, but also validating a set of criteria that directly impact value and resale:

– distance to subway and major transport routes,

– quality of the school district,

– age and reputation of the building and developer,

– orientation (south-facing preferred), floor (higher floors sell for more),

– amount of condo fees,

– potential for reconstruction or major renovation in the area.

In a country with extreme density and rapidly evolving urban planning, these parameters often make the difference between an appreciating asset and a stagnant property.

2. Legal, Technical, and Financial Due Diligence

Even before signing a preliminary agreement, a phase of serious due diligence is essential. It combines three aspects:

This step is even more crucial for non‑residents, who can less easily see the property and often rely on intermediaries. The classic risk for a foreign buyer is overlooking existing mortgages or liens, as some debts “follow” the property if the seller defaults.

3. Negotiation and Contract Signing (매매계약서)

Once the property is selected and initial checks are done, the parties sign a sales contract, the 매매계약서 (Maemae Gyeyakseo). This document defines in particular:

Essential points to formalize include the sale price, payment schedule (down payment, interim payments, balance), the amount of the initial deposit – typically around 10 % of the price, key handover deadlines, and any conditions precedent (loan approval, administrative authorization, etc.).

Key Contractual Elements of a Real Estate Preliminary Sales Agreement

At this stage, involving a bilingual lawyer or judicial scrivener is not a luxury but an assurance: it is about verifying that clauses are not unbalanced, that particularities related to foreigner status (need for a local permit, real estate registration number, etc.) are integrated into the contract timeline, and that the payment schedule allows time to secure funds in compliance with foreign exchange controls.

4. Administrative Notifications and Foreign Exchange Regulations

For a foreign resident, the procedure is relatively straightforward. They must file an acquisition report with the competent city, county, or district office within 60 days of signing or paying the balance. Delay can result in a fine of up to 3 million won.

For a non‑resident, an additional layer is added: applicable taxation may differ from that for residents, impacting tax obligations and filing procedures.

In the recent context of enhanced anti-money laundering efforts, Seoul has clearly stated that in case of suspicion, files would be forwarded to the Korean Financial Intelligence Unit (FIU) and potentially shared with foreign authorities.

5. Property Registration and Title Certificate

The final phase, often underestimated by foreign buyers, is to register the transfer of ownership with the competent land registry. Without this registration, the legal owner remains the previous seller.

The standard file includes:

– the sales contract,

– the registration application,

– a certified extract from the land register,

– proof of identity (passport, residence card),

– the real estate registration number (mandatory for a non-resident without a Korean resident number),

– receipts proving payment of acquisition taxes and registration fees.

Foreigners should generally expect 2 to 4 weeks for registration processing, a slightly longer timeframe than for locals. Once finalized, the new owner can obtain an updated certificate of ownership, which will serve as proof in case of resale, mortgage, or visa procedure linked to the investment.

Financing a Purchase as a Foreigner

Unlike other Asian markets that almost systematically require cash payment from non-residents, South Korea allows foreigners to obtain mortgage loans. That said, the conditions are significantly stricter than for citizens.

Down Payment, Ratios, and Interest Rates

Major commercial banks – KEB Hana Bank, Shinhan Bank, Woori Bank, KB Kookmin Bank, Industrial Bank of Korea – as well as the Korea Housing Finance Corporation (KHFC) offer loans to foreigners meeting certain criteria. Several constants are observed:

Conditions tighten further for non-residents, where the bank must validate international income flows and sometimes contend with foreign tax systems.

Visa, Income, and Supporting Documents

Banks almost always require a valid long-stay visa (F‑2, F‑4, F‑5, F‑6, or certain E-category work visas) to grant a loan. A tourist or short-term visitor cannot expect to obtain a mortgage.

Regarding income, typical requirements are:

– at least 6 to 12 months of documented income history,

– a net monthly income equivalent to 3 to 4 times the projected monthly loan payment,

– for self-employed individuals, 2 to 3 years of financial statements, tax returns, and proof of business stability.

Applications must include:

– passport and visa or foreign resident card,

– sales contract,

– pay stubs, employment contracts, tax notices,

– bank statements,

– marriage documents for any co-borrowers,

– translations and notarization/apostille of all foreign documents.

Financing Alternatives

For some profiles, access to local credit remains difficult. Three strategies are then common:

– cash purchase: many Asian investors – notably Chinese or North American – pay in full with capital, which secures the transaction but increases exposure to the local currency;

– financing in the home country: via mortgage refinancing on a property held at home, a line of credit, or other mechanisms, with subsequent transfer of funds to South Korea;

– Korean hybrid systems: such as financing the jeonse deposit, where the borrower finances part of this heavily capitalized deposit (often 50‑80 % of the property value) in exchange for no monthly rent.

Each scheme involves different regulatory constraints in terms of foreign exchange, taxation, and exchange rate risk.

What Does a Purchase Really Cost? Overview of Taxes and Fees

Korean real estate taxes are multiple and progressive. For a foreigner, they are not fundamentally different from those for a local, but some subtleties may appear depending on the holding period and the investor’s nature (individual, company, non-resident…).

Upon Acquisition

Upon purchase, a set of taxes and fees add up. Their overall range for the buyer is generally between 3.5 % and 5 % of the price, with wider estimates up to 13 % in some highly taxed configurations (multiple owners, companies, luxury properties, etc.). Based on available data, it can be summarized as follows:

Cost Type	Indicative Range	Main Comment
Acquisition Tax (취득세)	1–3 % (residences); up to 12 % for some cases	Progressive rates depending on value, type, and status
Registration Tax	0.2–0.4 % (often included); sometimes 1–12 % mentioned	Depends on register type and property
Stamp Duty	≈ 0.02–0.3 %	Based on property value
Local Education Tax	20 % of the acquisition tax amount	Surcharge allocated to education
Attorney Fees	0.5–1 % of price (or hourly billing)	Drafting and verification of deeds
Agency Commission (buyer’s share)	≈ 0.4–0.6 %	Seller’s share is typically 0.3–0.5 %
National Housing Bonds	≈ 5 % of price (some cases)	Bonds that can be repurchased at a discount
VAT (buildings, > 85 m², commercial)	10 % of the building price (land excluded)	Applies to new or commercial properties

The key takeaway is that purchase taxation in South Korea is significant. An international investor must account for this in profitability projections, especially since resale will also incur costs.

During Ownership

Once an owner, one must pay annually:

In practice, foreigners who accumulate several high-value properties in South Korea quickly become liable for this additional tax, designed to discourage speculative real estate concentration.

Upon Resale and on Rental Income

Upon sale, a capital gains tax (양도소득세) applies. The scale is progressive, ranging from about 6‑10 % to 45‑50 %, but rises sharply for very short holding periods: for a home resold less than two years after purchase, rates can go up to 70 % in some configurations.

For investors who rent out their property, rental income is taxed at progressive rates (6 % to 45 %) on net income, with an annual declaration typically due by the end of May. The Korean rental system is particular:

– Wolse (월세): moderate deposit + monthly rent, similar to Western practices,

– Jeonse (전세): enormous deposit (often 50‑80 % of the property value) with no monthly rent, refunded to the tenant at the end of the contract,

– Banjeonse (반전세): hybrid formula with an intermediate deposit and reduced rent.

For a foreign owner, jeonse can seem very attractive – a significant cash volume to invest – but carries specific risks, especially in case of property value decline or liquidity lock-up.

Buying to Obtain a Right of Residence

Beyond purely asset-based logic, South Korea has established a residence by real estate investment scheme. This is the famous IISRE system, administered by the Ministry of Justice and the Korean Immigration Service.

From Investment to F‑2 Visa, then F‑5

The program’s foundation is the F‑2 (resident) visa, accessible to foreigners who invest a minimum amount in government-designated tourism real estate projects. This threshold is currently around 1 billion won for most IISRE projects, having been raised from 500 million.

The general architecture is as follows:

The advantage is considerable: right to live, work, study in South Korea, access to public health and education systems, inclusion of immediate family (spouse, minor children, some unmarried adult children), and the future possibility of applying for citizenship without renouncing original nationality.

Practical Process of an IISRE Investment

An investor interested in this pathway follows a more complex journey than a “classic” purchase:

– entry into the territory (often via a visitor or multiple-entry visa),

– pre-screening with the competent immigration office to validate project eligibility,

– site visits and signing of preliminary agreements,

– opening an account at a designated foreign exchange bank,

– transfer of funds from abroad (with proof of capital origin),

– obtaining a foreign real estate registration number,

– acquisition declaration to local authorities,

– registration of the property transfer at the land registry court,

– submission of the F‑2 visa application,

– monitoring of the investment for 5 years, then application for F‑5.

Non-compliance with any condition (early sale, renting out, investment value falling below the threshold, etc.) results in visa cancellation.

After the Purchase: Management, Risks, and Best Practices

Becoming a remote owner raises a set of practical questions: who manages tenants, pays taxes, oversees repairs, responds to emergencies? For a local resident, these tasks are heavy but manageable. For an investor living thousands of kilometers away, they can become a nightmare.

Property Management and Administration

In South Korea as elsewhere, an ecosystem of property management companies has developed to meet these needs. Their typical services include:

Fees are often between 5 % and 10 % of the monthly rent, to which may be added setup fees (a few hundred thousand won) or specific commissions for re-leasing. For a foreign investor, this cost must be factored into yield calculations, especially in a country where gross rental yields are relatively low, often between 0.5 % and 2.4 % according to sources and segments.

Risks Specific to Foreign Buyers

Several categories of risks deserve particular attention:

The best defense remains a combination of reliable local professionals (lawyer, agency, manager), meticulous due diligence (titles, permits, lease structure, tax history), and a long-term vision (at least 7‑10 years) rather than speculative bets on a few quarters.

Conclusion: An Accessible Market, But One That Must Be Earned

The real estate purchase process for foreigners in South Korea is neither impossible nor improvised. The legal framework clearly allows foreign ownership, banks lend to non-nationals who meet the criteria, and residence-by-investment schemes exist for those wishing to turn their acquisition into a migration gateway.

In return, the foreign buyer must contend with:

For a savvy investor, capable of surrounding themselves with experts and willing to take the time to understand this playing field, South Korea offers a rare cocktail however: legal security, dynamic economy, solid rental demand in large cities, long-term capital appreciation potential, and, for some profiles, a gateway to long-term residence in one of the world’s leading technological powers.