Selling a house to your son may still be considered a gift if he can't prove the remittance! Tax office checks 'where the house

If they can provide proof of the source of funds and actual payment, and the tax office confirms the transaction is genuine, it will be treated as a sale and not considered a gift. Therefore, in addition to the real estate sales contract, title transfer documents, and bank remittance records, the buyer's ability to clearly explain the source of funds is an important proof for real estate transactions between relatives. If a father gave his son 2.44 million won each year in the past, can that money be used to buy the father's house? Another common situation is when parents transfer cash to their children's names over the years, utilizing the annual gift tax exemption limit. In 2026, the current gift tax exemption limit remains 2.44 million won per donor per year. The Ministry of Finance also explained that parents can gift cash to their children using the annual gift tax exemption limit, and children can use these funds for their own investments or property purchases after receiving them. Therefore, funds legally gifted by parents to their children in the past and actually transferred for the children's control can later become the financial source for the children's home purchases. However, if the funds later return to the parents' account, or if the parents actually retain control, causing a break or discontinuity in the cash flow, it may cause issues in asserting later that these funds were the children's own money for home purchases. If only part of the house payment cannot be proven, it's not necessarily considered a gift in its entirety. Suppose the father and son agree on a house sale price of 10 million won. If the son can prove that 7 million won of it actually came from his own savings, salary, or other legal funds, but cannot provide concrete proof for the source of the remaining 3 million won, it does not mean that the entire 10 million won will necessarily be considered a gift. According to relevant interpretations by the Ministry of Finance, for property sales between relatives within the second degree of kinship,