Hyundai Han River Villa, 177 sq. meters — no mortgage on registry

Source of funds key to determining whether gift tax was evaded

A Maltese national born in 1994 purchased a unit at Hyundai Han River Villa in Cheongdam-dong, Gangnam-gu, Seoul for 6.7 billion won in an all-cash transaction. [Naver Street View]
A Maltese national born in 1994 purchased a unit at Hyundai Han River Villa in Cheongdam-dong, Gangnam-gu, Seoul for 6.7 billion won in an all-cash transaction. [Naver Street View]

A Maltese national born in 1994 has purchased a luxury home in Cheongdam-dong, Gangnam-gu, Seoul in the 6 billion won range, raising fresh questions about how young foreign nationals are financing ultra-high-end property deals in the capital. The case echoes a transaction confirmed last year, in which a Maltese national born in 1996 bought a nearby luxury home for 6.9 billion won.

According to the Ministry of Land, Infrastructure and Transport's actual transaction price disclosure system and court registry records, a Maltese national identified only as "A" purchased the ninth-floor unit of Hyundai Han River Villa in Cheongdam-dong — with an exclusive use area of 177.69 square meters — for 6.7 billion won ($4.93 million) on Aug. 4.

Hyundai Han River Villa is an 18-unit luxury residential complex completed in 1992. It sits along the Han River in one of Cheongdam-dong's most exclusive stretches, flanked by Warner Cheongdam and Eterno Cheongdam, two of the country's most prestigious addresses. The transaction is the first recorded sale of this particular unit since the government began disclosing actual transaction prices.

What has drawn attention is the buyer's age and how the purchase was financed. A, who carries a Korean surname and was born in 1994, is in their early 30s. No mortgage has been registered against the property since the ownership transfer, meaning there is no trace of a loan taken out against the home from a financial institution — making the source of the 6.7 billion won an open question.

Some observers have raised the possibility of an illegal gift transfer. Malta, a Southern European nation, is widely known as a tax haven that levies neither inheritance nor gift taxes. Changing one's nationality to Maltese can allow a person to sidestep Korea's gift tax. The fact that A, at a relatively young age, paid the full 6.7 billion won in cash adds to the suspicion.

A similar transaction had already surfaced in Cheongdam-dong. Last year, a Maltese national born in 1996 bought a 243-square-meter unit at Yonsei River Terrace in Cheongdam-dong for 6.9 billion won. No mortgage was registered on that property after the ownership transfer, either.

In 2024, a case emerged in which a homeowner in their 50s, identified as "B," changed their nationality to Maltese and then, five months later, sold a 226-square-meter unit at Hyosung Cheongdam 101 in Gangnam-gu to a Maltese national in their 30s with the same surname, identified as "C," for 7.41 billion won.

However, the buyer's nationality, age, and the absence of a mortgage on the property alone are not sufficient to determine whether a gift was made or to characterize the nature of the funds. Various financing arrangements are possible — borrowing through overseas financial institutions, liquidating existing assets, or transferring funds within a family. Establishing whether an illegal gift transfer or tax evasion actually occurred would require a separate investigation into the origin of the purchase funds and the relationship between the parties involved.

The government has recently been tightening scrutiny of the funding sources behind foreigners' domestic real estate transactions. The Ministry of Land, Infrastructure and Transport has been conducting a targeted investigation into 840 suspected illegal transactions by foreigners, selected from housing, non-housing and land deals reported nationwide between June last year and July this year.

The probe is examining foreigners' financing details, including proceeds from the sale of shares, bonds and cryptocurrencies, as well as loans from overseas financial institutions. Investigators are also looking into the actual origins of funds remitted from abroad, whether any money was brought in illegally, and the possibility of improper gift transfers.

Concerns have long been raised that it is difficult to trace the financing structures behind foreigners' domestic real estate transactions. When funds are sourced from abroad without using a domestic financial institution, the registry alone is often insufficient to verify where the money actually came from.

"Acquiring foreign citizenship through a period of residency and investment is a classic method of tax avoidance," a real estate brokerage industry official said. "When similar ultra-high-end transactions keep repeating, there needs to be a process to verify where the money is coming from."


quq@heraldcorp.com