Article 1(Purpose) #
The purpose of this Act is to contribute to the sound development of the national economy through the prevention of antisocial acts, such as speculation, evasion of taxes and acts circumventing laws, etc. which abuse the real estate registration system, the normalization of real estate transactions, and the stabilization of real estate prices, by having any ownership and other real rights to real estate registered under the names of those having real rights so as to conform to the substantial relation of rights.
[This Article Wholly Amended on Mar. 31, 2010]
Article 2(Definitions) #
The definitions of terms used in this Act shall be as follows:
1. The term "title trust agreement" means a stipulation (including where it is made in the form of a mandate or the sale on consignment or ratification) made between a person (hereinafter referred to as "person having real rights") who holds, has actually acquired or is to acquire the ownership of or other real rights to any real estate (hereinafter referred to as "real rights to real estate") and another person, to the effect that the person having the actual right holds or is to hold the real right to the real estate internally and another person registers the ownership under his or her name (including a provisional registration; hereinafter the same shall apply); provided, each of the following items are excluded:
(a) Where a creditor has a real right to any real estate transferred, or makes a provisional registration thereof, to secure a performance of obligation;
(b) Where two or more persons agree to specify the location and area of real estate and to hold sectional ownership, respectively, and they make a registration as co-ownership of such sectional owners;
(c) Where the fact that the real estate is trust property, as provided for in the Trust Act or the Financial Investment Services and Capital Markets Act, is registered;
2. The term "title truster" means a person having the actual right who has any real right to his or her own real estate registered under another person's name, according to the title trust agreement;
3. The term "title trustee" means a person who registers a real right to real estate of a person having the actual right under his or her name according to the title trust agreement;
4. The term "real-name registration" means registering any real right to real estate which had been registered under the name of the title trustee pursuant to the title trust agreement before the Act on the Registration of Real Estate under Actual Titleholder's Name (Act No. 4944) enters into force under the name of the title truster after the Act on the Registration of Real Estate under Actual Titleholder's Name (Act No. 4944) enters into force.
[This Article Wholly Amended on Mar. 31, 2010]
Article 3(Obligation for registration in name of person having actual right) #
(1) No person shall register any real right to real estate under the name of the title trustee pursuant to the title trust agreement.
(2) Where a creditor has a real right to any real estate transferred to secure a performance of obligation, he or she shall submit, to a registration officer, an application for registration accompanied by a document specifying the obligor, amount of credit, and the fact that it is a security for the performance of obligation.
[This Article Wholly Amended on Mar. 31, 2010]
Article 4(Effect of title trust agreement) #
(1) Any title trust agreement shall be null and void.
(2) Any change in the real rights to any real estate by a registration made under the title trust agreement shall be null and void; provided, this shall not apply where the title trustee is one of the parties to the contract to acquire the real right to real estate, and the other party thereto does not know the fact that the title trust agreement exists.
(3) Invalidity under paragraphs (1) and (2) shall not be effective in respect of any third person.
[This Article Wholly Amended on Mar. 31, 2010]
Article 5(Penalty) #
(1) A penalty within the limit of an amount equivalent to 30/100 of the value of the relevant real estate shall be imposed on any of the following persons:
1. A title truster who violates Article 3 (1);
2. A creditor who violates Article 3 (2) and an actual obligor who has the document under the same paragraph submitted with a false obligor described therein.
(2) The value of the real estate under paragraph (1) shall be based on any of the following value as of the day on which the penalty is imposed; provided, where a person who violates Article 3 (1) or 11 (1) has already terminated title trust relations or made a real-name registration on the day the penalty is imposed, it shall be the value of the real estate at the point of the title trust relations termination or the real-name registration:
1. In cases of ownership, the standard market price under Article 99 of the Income Tax Act;
2. In cases of any real right, other than ownership, an amount assessed by such method determined by Presidential Decree under Articles 61 (5) and 66 of the Inheritance Tax and Gift Tax Act.
(3) Criteria for the imposition of penalty under paragraph (1) shall be prescribed by Presidential Decree by taking account of the value of real estate under paragraph (2) (hereinafter referred to as "assessed value of real estate"), the period of violating paragraph (3), as to whether the violation is committed for the purpose of evading taxes or avoiding restrictions under the Acts and subordinate statutes, and other relevant factors.
(4) If the amount of the penalty under paragraph (1) exceeds the amount determined by Presidential Decree, the excess may be paid in kind, as prescribed by Presidential Decree.
(5) The penalty under paragraph (1) shall be imposed and collected by a Special Self-Governing Province Governor, a Special Self-Governing City Mayor, the head of each Si/Gun/Gu having jurisdiction over the location of the real estate concerned. In such cases, the penalty shall be imposed, without delay, after the offense is confirmed. <Amended on Jan. 6, 2016>
(6) If the penalty under paragraph (1) is not paid by the payment deadline, it shall be collected in accordance with the Act on the Collection of Local Administrative Penalty Charges. <Amended on Aug. 6, 2013; Mar. 24, 2020>
(7) Matters necessary for the imposition, collection, etc. of the penalty under paragraph (1) shall be prescribed by Presidential Decree.
Article 5-2(Extension of payment deadline and installment payment of penalty) #
(1) A Special Self-Governing Province Governor, a Special Self-Governing City Mayor, or the head of each Si/Gun/Gu deems it difficult for a person who is imposed with a penalty under Article 5 (1) (hereinafter referred to as "obligator to pay a penalty") to pay the whole penalty in falling under any of following as the cases the amount of the penalty exceeds the criteria prescribed by Presidential Decree, he or she may extend the payment deadline and have the person make installment payment. In such cases, deemed necessary, he or she may request securities as prescribed by Presidential Decree:
1. Where a person suffers from significant damages in his or her property due to an accident or theft, etc.;
2. Where a person is in a critical crisis of business due to deterioration of business situation;
3. Where it is expected for a person to be in a significant difficulty of financial condition when he or she pays the penalty at a time;
4. Where an obligator to pay a penalty or his or her family member who lives with him or her is required to have a long-term care due to diseases or serious injuries;
5. Where there is a reason similar to provisions of subparagraphs 1 through 4.
(2) Where an obligator to pay a penalty intends to apply for the extension of payment deadline of a penalty or installment payment thereof under paragraph (1), he or she shall apply for a Special Self-Governing Province Governor, a Special Self-Governing City Mayor, or the head of each Si/Gun/Gu within 30 days from the date on which he or she is notified for payment of a penalty.
(3) A Special Self-Governing Province Governor, a Special Self-Governing City Mayor, or the head of each Si/Gun/Gu, if an obligator to pay a penalty whose payment deadline has been extended or who has been allowed to make installment payment falls under any of the followings, may revoke the decision of extension of the payment deadline or installment payment, and collect such penalty at a time:
1. When the penalty decided to make extension of the payment deadline or installment payment is not paid within the payment deadline;
2. When the security is changed or the requirements of a Special Self-Governing Province Governor, a Special Self-Governing City Mayor, or the head of each Si/Gun/Gu necessary for preservation of the security are not performed;
3. When it is deemed that the whole or remaining penalty is not collectable due to such cases he or she is under compulsory execution, commencement of auction, declaration of bankruptcy, dissolution of a corporation, or disposition on default of national taxes or local taxes.
Article 6(Charges for compelling performance) #
(1) A person on whom the penalty under Article 5 (1) 1 is imposed, shall register, without delay, the real right to the real estate concerned under his or her name; provided, this shall not apply in cases falling under the proviso to Article 4 (2), and if any justifiable ground exists not to register the right under his or her own name, he or she shall register it under his or her own name without delay after such ground ceases to exist.
(2) If a person violates paragraph (1), an amount equivalent to 10/100 of the assessed value of real estate shall be imposed on him or her as charges for compelling performance when one year passes from the date on which the penalty is imposed (in cases of the latter part of the proviso to paragraph (1), it refers to the time the ground not to make registration ceases to exist) and an amount equivalent to 20/100 of the assessed value of real estate, respectively, if another one year passes thereafter without paying it.
(3) Article 5 (4) through (7) shall be applied mutatis mutandis to the charges for compelling performance.
[This Article Wholly Amended on Mar. 31, 2010]
Article 7(Penal provisions) #
(1) A person who falls under any of the following subparagraphs shall be punished by imprisonment for not more than five years, or by a fine not exceeding two hundred million won: <Amended on Jan. 6, 2016>
1. A title truster who violates Article 3 (1);
2. A creditor who violates Article 3 (2) and an actual obligor who has the document under the same paragraph submitted with a false obligor described therein.
(2) A title trustee who violates Article 3 (1) shall be punished by imprisonment for not more than three years, or by a fine not exceeding one hundred million won.
(3) Deleted. <Jan. 6, 2016>
[This Article Wholly Amended on Mar. 31, 2010]
Article 8(Special cases for families of same clan and spouse) #
If any of the following cases are not involved in evading any tax and compulsory execution, or avoiding any legal restrictions, Articles 4 through 7, and 12 (1) through (3) shall not apply: <Amended on Jul. 12, 2013>
1. Where the real right to any real estate held by a family of the same clan is registered under the name of a person, other than the family of the same clan (including where the registration is made with both the family of the same clan and its representative indicated);
2. The real right to any real estate is registered under the name of a spouse;
3. Where the real right to any real estate held by the entity affiliated to a religious organization is registered under the name of the religious organization.
[This Article Wholly Amended on Mar. 31, 2010]
[Title Amended on Jul. 12, 2013]
Article 9(Investigation) #
(1) A Special Self-Governing Province Governor, a Special Self-Governing City Mayor and the head of each Si/Gun/Gu may, if deemed necessary, conduct an investigation to confirm whether Articles 3, 10 through 12 and 14 have been violated. <Amended on Jan. 6, 2016>
(2) The Commissioner of National Tax Service may, if he or she deems a person is suspected of tax evasion, conduct an investigation to confirm whether Articles 3, 10 through 12 and 14 have been violated.
(3) If a public official has discovered, in the course of his or her duties, that Articles 3, 10 through 12 and 14 have been violated, he or she shall notify the fact to the Commissioner of the National Tax Service, a Special Self-Governing Province Governor, a Special Self-Governing City Mayor or the head of each Si/Gun/Gu having jurisdiction over the location of the real estate concerned. <Amended on Jan. 6, 2016>
[This Article Wholly Amended on Mar. 31, 2010]
Article 10(Penal provisions against persons making no registration for long time) #
(1) With regard to a person governed by Articles 2 (1) and 11 of the Act on Special Measures for the Registration of Real Estate, and Article 2 of the Addenda of the same Act(Act No. 4244), who is liable for registration and fails to apply for registration of ownership transfer within three years from any of the following days (hereinafter referred to as "person making no registration for a long time"), a penalty within the limit of an amount equivalent to 30/100 of the assessed value of real estate (where a fine for negligence under Article 11 of the Act on Special Measures for the Registration of Real Estate has already been imposed, referring to an amount obtained by deducting that amount equivalent to the fine for negligence) shall be imposed on him or her; provided, the same shall not apply where any ground occurs to apply for registration since the registration is not effective under the main sentence of Articles 4 (2) and 12 (1) and where any justifiable ground exists making it impossible to apply for registration:
1. If contracting parties bear a mutual equivalent obligation of performance, the day on which the performance of the consideration has actually been completed;
2. If only one of the parties bears the obligation, the day on which the contract comes into operation.
(2) Criteria for imposing a penalty under paragraph (1) shall be prescribed by Presidential Decree, in consideration of the assessed value of real estate, the period of failing to apply for the registration of ownership transfer, whether it is intended to evade taxes or avoid restrictions under the Acts and subordinate statutes, whether fines for negligence under Article 11 of the Act on Special Measures for the Registration of Real Estate has been imposed, and any other relevant factors.
(3) Article 5 (4) through (7), and Article 5-2 shall be applied mutatis mutandis to the penalty under paragraph (1). <Amended on Jan. 6, 2016>
(4) If a person making no registration for a long time fails to apply for the registration of ownership transfer even after the penalty has been imposed on him or her under paragraph (1), the charges for compelling performance shall be imposed on him or her by applying mutatis mutandis Article 6 (2) and (3).
(5) A person making no registration for a long time (excluding a person falling under the proviso to paragraph (1)), in violation of paragraph (1), shall be punished by imprisonment for not more than five years, or by a fine not exceeding two hundred million won. <Amended on Jan. 6, 2016>
Article 11(Registration under existing title trust agreement in real name registration) #
(1) A title truster who has registered, or has another person register the real right to any real estate under the name of the title trustee according to the title trust agreement, before the Act on the Registration of Real Estate under Actual Titleholder's Name (Act No. 4944) enters into force (hereinafter referred to as "existing title truster") shall make real-name registration within one year (hereinafter referred to as "grace period") from the date the Act on the Registration of Real Estate under Actual Titleholder's Name (Act No. 4944) enters into force; provided, this shall not apply where the right to real estate is transferred to a third person from the title trustee due to an appropriation for public use, judicial decision, auction, or pursuant to other Acts (excluding transfer by inheritance), and in cases of real estate which is prescribed by Presidential Decree and, the title of which is entrusted by a religious organization, a local school annexed to a Confucian shrine, etc., with no intention of tax evasion and evasion of compulsory execution.
(2) A real name registration shall be deemed to have been made in accordance with paragraph (1) in any of the following cases: <Amended on May 19, 2011; Jan. 6, 2016; Nov. 26, 2019>
1. Where an existing title truster has performed any act, such as sale or other act of disposal, with respect to a real right to any real estate, and has transferred the registration thereof directly to an acquisitor through such act of disposal within the grace period;
2. Where the existing title truster has entrusted a Special Self-Governing Province Governor, a Special Self- Governing City Mayor, or the head of each Si/Gun/Gu having jurisdiction over the location of the real estate concerned with the sale of the real estate in accordance with other statutes, or has commissioned such sale to the Korea Asset Management Corporation established in accordance with the Act on the Establishment of Korea Asset Management Corporation, as prescribed by Presidential Decree, within the grace period; provided, the same shall not apply where the entrustment or commission of such sale has been withdrawn.
(3) If it is impossible to make real-name registration, disposal by sale, etc. under paragraphs (1) and (2) pursuant to other Acts, without any reason attributable to the person having the actual right, the real-name registration, disposal by sale, etc. shall be made within one year after such ground ceases to exist.
(4) If litigation as to the real right to real estate has been instituted before the Act on the Registration of Real Estate under Actual Titleholder's Name (Act No. 4944) enters into force, or during the grace period, the real-name registration, disposal by sale, etc. under paragraphs (1) and (2) shall be made within one year after the final and conclusive judgment on the litigation has been made (including cases which have the same effect as the said judgment).
Article 12(Effect of violation of obligation for real-name registration) #
(1) If the real-name registration, disposal by sale, etc. has failed to be made within the period prescribed in Article 11, Article 4 shall apply to the effect of the title trust agreement, etc. after such period elapses.
(2) Articles 5, 5-2 and 6 shall apply to a person who violates Article 11, according to the example of a person who violates of Article 3 (1). <Amended on Jan. 6, 2016>
(3) If a person who has never made registration under a title trust agreement before the Act on the Registration of Real Estate under Actual Titleholder's Name (Act No. 4944) enters into force makes registration pretending that it is a real-name registration prescribed in Article 11, he or she shall be punished by imprisonment for not more than five years, or by a fine not exceeding 200 million won.
[This Article Wholly Amended on Mar. 31, 2010]
Article 12-2(Joint penal provisions) #
Where the representative of a corporation or organization, an agent of a corporation, organization or individual, or an employee thereof commits an offence under Article 7, 10 (5) and 12 (3) in connection with the duties of the corporation, organization and individual, not only shall the offender be punished, but also the corporation, organization or individual shall be punished by a fine under applicable provisions: Provided That this shall not apply where such corporation, organization or individual has not been negligent in giving due attention and supervision concerning the relevant duties to prevent such violation.
[This Article Added on Jan. 6, 2016]
Article 13(Special cases of imposition of taxes on real-name registration) #
(1) If the real estate registered under a real name pursuant to Article 11 is a single registration and its value is not more than fifty million won, any taxes already exempted or imposed insufficiently, or not imposed, shall not be collected additionally, if it falls under any of the following subparagraphs. In such cases, the scope of the real estate on which the real-name registration is made and the calculation of the value thereof shall be prescribed by Presidential Decree:
1. Where a title truster and members of a household living together with him or her are exempted from taxes due to the transfer of one house by one household, before the Act on the Registration of Real Estate under Actual Titleholder's Name (Act No. 4944) enters into force, under the former provisions of subparagraph 6 of Article 5 of the Income Tax Act (referring to the Act prior to the amendment by Act No. 4803), but he or she does not become entitled to the said tax exemption on the day he or she transfers the house, due to the real-name registration;
2. Where the gift tax liable for payment before the Act on the Registration of Real Estate under Actual Titleholder's Name (Act No. 4944) enters into force is imposed on the holder of the title under Article 32-2 of the former Inheritance Tax Act (referring to the Act prior to the amendment by Act No. 5193).
(2) If real estate registered in real-name falls under real estate for non-business use and used directly for the proper business of the juristic person concerned until the expiration of grace period (referring to a period of one year after the ground cease to exist in cases under Article 11 (3) and (4)), the tax rate under Article 112 (2) of the former Local Tax Act (referring to the Act prior to the amendment by Act No. 6312) shall not be applicable, notwithstanding Article 10 of the Addenda of the amended Local Tax Act (Act No. 6312).
[This Article Wholly Amended on Mar. 31, 2010]
Article 14(Obligation of holder of existing security right for transfer, for presentation of documents) #
(1) If a creditor has a real right to real estate transferred to secure the performance of an obligation, before the Act on the Registration of Real Estate under Actual Titleholder's Name (Act No. 4944) enters into force, he or she shall submit, to a registration officer, a document specifying the obligor, amount of credit, and the fact that it is a security for the performance of obligation within one year after the Act on the Registration of Real Estate under Actual Titleholder's Name (Act No. 4944) enters into force.
(2) The penalty within an amount equivalent to 30/100 of the assessed value of real estate shall be imposed on a creditor who violates paragraph (1) and the actual obligor who has another person submit the document under paragraph 1 (1) with a false obligor described therein.
(3) Criteria for imposing penalties under paragraph (2) shall be prescribed by Presidential Decree, by taking account of the assessed value of real estate, the period of violating paragraph (1), whether the violation is committed to evade taxes or avoid restrictions under the Acts and subordinate statutes, etc.
(4) Article 5 (4) through (7), and Article 5-2 shall apply mutatis mutandis to penalties under paragraph (2). <Amended on Jan 6, 2016>
[This Article Wholly Amended on Mar. 31, 2010]
Article 15 #
Deleted. <Dec. 13, 1997>