Real Estate Commission for 1 Billion Won House Reduced from 9 Million Won to 5.5 Million Won
Government Begins Reducing Brokerage Fees for the First Time in 7 Years
[Asia Economy Reporter Jo Gang-wook] The government is set to reduce brokerage fees for sales and jeonse of high-priced housing by nearly half. This is the first time in over seven years since 2014 that the government has taken steps to lower brokerage fees. ▶Related article on page 6
On the 8th, the Anti-Corruption and Civil Rights Commission announced on the 9th that, after a plenary committee resolution, it recommended the “Improvement Plan for Housing Brokerage Fees and Brokerage Services” to the Ministry of Land, Infrastructure and Transport and 17 metropolitan local governments nationwide.
Under the current Enforcement Rules of the Licensed Real Estate Agents Act, the brokerage fee rates for real estate sales are 0.5% for 50 million to 200 million KRW, 0.4% for 200 million to 600 million KRW, 0.5% for 600 million to 900 million KRW, and 0.9% for over 900 million KRW.
The Commission presented four proposals to improve the brokerage fee rate system during the meeting. Among them, the preferred plan applies a progressive rate system by segment up to 1.2 billion KRW for sales and 900 million KRW for leases, with any amount exceeding these thresholds to be negotiated between the transaction parties and the licensed real estate agent to determine additional fees. Applying this plan would reduce the brokerage fee for a 1 billion KRW apartment sale from 9 million KRW to 5.5 million KRW. Additionally, the jeonse brokerage fee for a 650 million KRW property would decrease from 5.2 million KRW to 2.35 million KRW.
The recommendation also includes a principle that the party responsible for canceling the final contract must bear the full brokerage fee.
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The Ministry of Land, Infrastructure and Transport plans to form a “Brokerage Fee and Service Improvement Task Force (tentative name)” by the end of this month, initiate research projects including field surveys and public service satisfaction surveys, and finalize the improvement plan by July.
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