[Edaily Reporter Choi Jeong-hee ] On June 6, 2020, Mr. Kim sold his apartment in Guri, Gyeonggi Province, to Mr. Lee, a former coworker.

However, Mr. Kim did not move out. As of 2026, he continues to live in that apartment.

The transaction was unusual. Mr. Kim sold the apartment to Mr. Lee for 170 million won and then entered into a jeonse (lump-sum deposit lease) agreement with Mr. Lee, stating that he would live there for two years. It was a so-called “gap investment.” Excluding the jeonse deposit of approximately 140 million won, Mr. Kim lent the remaining 30 million won to Mr. Lee. As a result, Mr. Lee became the owner of the apartment in Guri without spending a single won of his own money.

This raises a question: Since Mr. Kim wasn’t directly receiving any money himself and planned to continue living there, why did he feel the need to sell the apartment? The events that unfolded over 2 minutes and 13 seconds reveal Mr. Kim’s secret.

2 minutes and 13 seconds: 30 million won made a full circle

Mr. Kim owned not only the apartment in Guri but also another property. He was a multi-homeowner who owned a multi-family house in Seocho-gu, Seoul. On April 18—two months before selling the Guri apartment—he had already signed a contract to sell the multi-family house in Seocho-gu.

Mr. Kim transferred the Guri apartment to Mr. Lee in June, before receiving the final payment for the multi-family home in Seocho-gu in September. As a result, by selling the multi-family home in Seocho-gu, Mr. Kim became a single-homeowner. In November, Mr. Kim paid his taxes under the “Special Tax Exemption for High-Value Homes Owned by a Single Household.”

Owners of one home per household are exempt from capital gains tax when selling their home, provided they meet certain requirements, such as holding the property for at least two years. However, in 2020, if the sale price exceeded 900 million won, capital gains tax was due on the capital gains exceeding that amount. (For sales on or after December 8, 2021, the threshold is 1.2 billion won.) Even so, single-home owners can receive a special long-term holding deduction of up to 80%, so the tax burden is not significant.

If Mr. Kim had still owned the apartment in Guri when he sold his home in Seocho-gu, he would not have been eligible for the single-homeowner benefit and would have had to pay taxes on the entire capital gain.

For this reason, Mr. Kim decided to sell the Guri apartment to Mr. Lee, a former coworker. The problem was that this transaction did not appear to be genuine.

On June 6, 2020, Mr. Kim sold the Guri apartment to Mr. Lee for 170 million won. Excluding the 140 million won jeonse deposit, Mr. Kim was supposed to receive 30 million won from Mr. Lee, but the bank transaction records were suspicious.

2:23:15 p.m.

Mr. Kim → Mr. Lee: 30 million won deposited.

2:25:28 p.m.

Mr. Lee → Mr. Kim, 30 million won deposited

It took 2 minutes and 13 seconds. That is the time it took for the 30 million won withdrawn from Mr. Kim’s account to pass through Mr. Lee’s account and return to Mr. Kim’s account unchanged. Mr. Kim lent Mr. Lee 30 million won, and Mr. Lee, having received the money, returned the 30 million won to Mr. Kim to pay the balance on the apartment. Then, three days later, on June 9, Mr. Kim paid the acquisition tax and legal fees that Mr. Lee was required to pay due to the change in ownership.

One year later, the money flowed in the opposite direction.

On July 21, 2021, Mr. Kim—now a non-homeowner—purchased an apartment in Guri from Mr. Lee. The purchase price was 170 million won, the same as a year earlier, even though apartment prices had risen during that period of soaring housing costs.

6:43:03 p.m.

Mr. Lee → Mr. Kim: 30 million won deposited

8:45:33 p.m.

Mr. Kim → Mr. Lee: 30 million won deposited

This time, Mr. Lee’s 30 million won made a full circle and landed back in his bank account in just two hours. Mr. Lee gave the 30 million won he had borrowed to Mr. Kim, and Mr. Kim gave 30 million won to Mr. Lee to cover the remaining balance on the apartment.

A Tax Audit That Hit Five Years Later

In November 2025, the Central Regional Tax Office launched a tax audit of Mr. Kim. The circular account transfers that took place in 2 minutes and 13 seconds and 2 hours.

The acquisition tax Mr. Kim paid on Mr. Lee’s behalf. The apartment repurchased a year later for the same price, even though market prices had risen. Mr. Kim, who had never moved out of the Guri apartment. Everything looked suspicious.

Mr. Kim’s explanation was as follows: He had decided to sell his home in Seocho-gu and the apartment in Guri to move to a better place, and had listed them for sale with a real estate agency well in advance. He claimed that paying the acquisition tax that Mr. Lee was supposed to pay was a permissible action under the contract. He also stated that Mr. Lee held the real estate title deed and had been paying the property tax.

Mr. Kim stated that he and Mr. Lee were merely acquaintances who had briefly worked together at a previous job and were not close. He also asked why he would go out of his way to help Mr. Lee buy the Guri apartment, given that doing so would make Mr. Lee a multiple-homeowner.

The National Tax Service pointed out that even though Mr. Kim claimed to have lent Mr. Lee the funds to purchase the Guri apartment, there wasn’t even a simple promissory note. They also noted that the absence of a jeonse deposit contract was problematic. Mr. Kim argued that since there was no legal obligation to draw up a separate lease agreement and financial transaction records were available, there was no need to write a promissory note.

The National Tax Service did not believe Mr. Kim. Concluding that Mr. Kim had engaged in a fictitious real estate transaction, the agency applied a “40% surcharge for improper underreporting” and reassessed the capital gains tax in March of this year. This implies that it was not a simple mistake; the agency viewed it as an intentional, fictitious real estate transaction.

The only thing that changed was the “documentation”… The house and the money remained the same

. Claiming he was being treated unfairly, Mr. Kim filed an appeal with the Tax Tribunal in May.

Mr. Kim argued that it was a legitimate real estate transaction. He contended that even if he had staged a fake transaction to reduce his tax burden, since he did not maintain dual sets of books, did not destroy any documents, and did not engage in any concealment, he should only be subject to a 10% surcharge. He argued that it should be viewed as a simple mistake.

The Tax Tribunal ruled in favor of the National Tax Service. It focused on the fact that when Mr. Lee purchased Mr. Kim’s apartment, the remaining balance of 30 million won was returned in just 2 minutes and 13 seconds, indicating that no actual transfer of funds took place.

The Board also determined that the fact Mr. Lee sold the apartment to Mr. Kim at the exact price he had paid a year earlier—despite market prices having risen over that period—was inconsistent with a typical transaction. It is speculated that the Board took this into account, reasoning that if Mr. Lee had sold the apartment at market value, he would likely have overpaid capital gains tax since he sold it less than a year after purchase.

Citing a Supreme Court precedent (2013Du7667), the Tax Tribunal noted that even if income is obtained through a sham ownership arrangement, such an arrangement alone is not considered “fraud” in the absence of acts related to tax evasion; however, it determined that Mr. Kim’s case did not fall under this exception.

The Tax Tribunal stated, “The fact that Mr. Kim sold the apartment in Guri and reacquired it within one year stemmed from the purpose of tax avoidance to qualify for the ‘one household, one high-value home’ tax exemption. Furthermore, he did not merely transfer the title to Mr. Lee; after drafting the sales contract, he created the appearance of payment by circulating the balance through a series of transfers, and the profit Mr. Kim gained from this transaction was substantial.”

The contract signed by Mr. Kim and Mr. Lee, the title transfer registration, and the property tax receipt allegedly issued to Mr. Lee were all genuine. However, what the National Tax Service and the Tax Tribunal scrutinized was the actual flow of funds.

The 30 million won balance for the apartment was returned to the original account in just 2 minutes and 13 seconds. Neither the money nor the people moved. The only thing that changed was the name of the owner listed on the property registry.