Foreign investment in real estate in Korea has significantly increased since limitations on foreign investors’ acquisition of land were removed under the revised Aliens Land Acquisition Law in 1998 and the transparency of the Korean real estate market has been improved. Real estate investment in Korea may be structured in a tax efficient manner by using tax efficient investment vehicles such as an Asset Backed Securities Special Purpose Company (ABS-SPC), Real Estate Trust Fund (RETF), or Real Estate Investment Trust (REIT).
However, usage of the ABS-SPC structure is diminishing significantly, while RETFs and REITs have been widely used in recent years for the acquisition of real estate.
This summary has been prepared to help foreign investors who intend to invest in real estate in Korea by providing a discussion of major tax issues related to real estate investment. As tax incentives for real estate investment are complicatedly enumerated in various tax laws, regulation and tax-exemption ordinances set forth by local governments, this summary does not cover these issues. As noted above, there are various issues to be carefully reviewed regarding real estate investment in Korea. In this regard, it is highly recommended that you consult with a tax adviser in Korea before making any decision on investment in real estate in Korea.
Source : PWC