A Study on the Necessity of Legal Restrictions on Real Estate Ownership and Acquisition by Foreign Individuals and Foreign Governments in Metropolitan and Non-Metropolitan Areas of South Korea

Recently, the ownership of real estate by foreign individuals and foreign governments in South Korea has continued to increase, with its scope expanding to strategic locations such as core metropolitan areas and major transportation hubs. Nevertheless, South Korea’s current system for foreign real estate acquisition remains largely based on a post-reporting framework, lacking substantive ex ante regulatory mechanisms and rigorous review procedures, which reveals significant institutional limitations. This regulatory gap may give rise to various concerns, including national security risks, instability in the real estate market, issues related to the public nature of land, potential reverse discrimination against Korean nationals, and taxation issues involving foreign individuals and foreign governments. The purpose of this study is to analyze South Korea’s institutional framework for foreign and foreign government real estate acquisition from a comparative international perspective and to examine the necessity of regulatory measures based on the principle of reciprocity. To this end, the study conducts a comparative analysis of foreign real estate regulation policies in major countries, including Switzerland, Austria, Denmark, China, Thailand, Australia, Canada, and the United States. The analysis reveals that many countries generally restrict foreign ownership of real estate or strictly manage such ownership through prior approval systems, and that foreign governments, in particular, are subject to in-depth screening mechanisms considering national security and public interest. Furthermore, through the case of the Chinese government’s land ownership in Yongsan, Seoul, this study confirms an imbalance in the principle of reciprocity, as South Korea maintains a relatively open structure for foreign government real estate acquisition, while land acquisition by Korean nationals in China is virtually impossible. This indicates a significant lack of institutional coherence when compared to international practices. This study proposes that South Korea should introduce a prior approval system or in-depth screening mechanism for real estate acquisition by foreign individuals and foreign governments, and implement strict regulations that restrict ownership and acquisition in core metropolitan areas and strategically important regions related to military, diplomatic, and industrial interests. Such institutional reforms are not intended to exclude foreign investment but represent a policy choice aimed at ensuring fairness based on reciprocity while simultaneously promoting national security and stability in the real estate market. Therefore, it is essential to improve the legal and institutional framework by adopting regulations that, in principle, restrict real estate ownership and acquisition by foreign individuals and foreign governments in both metropolitan and regional areas in South Korea.