South Korea’s National Tax Service (NTS) is stepping up oversight of virtual assets by introducing new tools to track how cryptocurrency is used in real estate transactions.
As per a local report, the NTS is finalizing an “Integrated Virtual Asset Analysis System” that will include a feature to scrutinize the source of funds used when purchasing property. The move aims to close tax loopholes, particularly those related to gift taxes and undeclared income linked to crypto holdings.
Analyzing property fund flows
The system will focus on verifying the origin of funds used in property acquisitions and analyzing how those funds move during transactions.
It is being designed to allow authorities to review the source of funds used in real estate purchases, track fund flows linked to property transfers, and identify cases where profits from virtual assets are used in acquisitions.
The system will also integrate overseas real estate records, integrated annual taxpayer data, and virtual asset reporting from foreign financial accounts to strengthen cross-border monitoring. South Korea is set to begin receiving virtual asset transaction data from 56 countries in 2027 under the OECD’s Crypto-Asset Reporting Framework (CARF), with overseas real estate information sharing scheduled to begin in 2030.
Crackdown on tax evasion
Under current law, if the source of funds for a property purchase cannot be verified, authorities can impose taxes under the Inheritance and Gift Tax Act.
The NTS has long investigated funding sources for real estate deals, but officials say the absence of crypto-related data in existing systems has limited their ability to trace such transactions effectively.
An NTS official stated, “There are instances where explanatory materials regarding the source of funds are submitted when acquiring real estate. We plan to organize the necessary information to verify cases where virtual assets are included.”
The official added, “We expect to investigate more deeply if there appears to be no clear income source, while assessing whether there was sufficient income to engage in virtual asset trading.”
Building investigation capabilities
Alongside system development, the NTS is also enhancing its internal capabilities. According to the Public Procurement Service’s KONEPS, the agency recently released preliminary plans for a specialized training program focused on virtual asset transaction tracking.
The program is expected to cover blockchain transaction analysis, identification of crypto-related tax evasion methods, and data collection and evidence management, with attention to tracing funds across decentralized finance (DeFi) platforms and mixing services.
A broader crypto tax framework
The move comes ahead of South Korea’s planned implementation of virtual asset taxation in January 2027. The rollout remains politically contested. In March 2026, the main opposition People Power Party proposed scrapping the planned tax on crypto gains, citing fairness, double-taxation, and enforcement concerns. Detailed tax standards for activities such as staking, airdrops, lending, hard forks, and NFTs are still under development.
Moreover, in a related development, South Korea launched blockchain-based deposit tokens for government spending, enabling programmable payments and improved transparency as the initiative expanded beyond EV subsidies into broader fiscal use.
Oversight of crypto use expands
With cryptocurrency increasingly being used in high-value transactions like real estate, regulators are moving to ensure transparency and compliance. The NTS’s latest measures reflect a growing global trend of integrating blockchain analytics into traditional financial oversight.
As enforcement tools improve, authorities are expected to take a more proactive approach in identifying undeclared crypto income and preventing tax evasion in both domestic and cross-border transactions.
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