"The '900 Million Sale = 0.9% Brokerage Fee Rate' Rule Breaks... 'Relaxation Within October'"

"Ministry of Land, Infrastructure and Transport Reflects Anti-Corruption and Civil Rights Commission Recommendations in Legislative Notice of 'Certified Real Estate Agent Act Enforcement Decree and Enforcement Rules'"

There is a property listing posted at a real estate agency in Songpa-gu, Seoul. Photo by Mun Ho-nam munonam@

[Sejong=Asia Economy Reporter Moon Chaeseok] The Anti-Corruption and Civil Rights Commission (ACRC) announced on the 14th that "housing brokerage fees will be significantly eased as early as next month, and consumer protection against housing brokerage accidents will be strengthened." The ACRC expects that the burden on citizens, who had to pay a brokerage fee rate of 0.9% when buying or selling houses priced over 900 million KRW, will be reduced.

An ACRC official stated, "The draft amendments to the enforcement decree and enforcement rules, which reflect a significant portion of the 'Housing Brokerage Fees and Brokerage Service System Improvement' recommended by the ACRC last February, have been announced for public comment, and it is expected that the brokerage fee burden on citizens will be alleviated." Based on a survey where 53% of 2,478 citizens who posted opinions on the National Idea Platform responded that the brokerage fee burden was excessive, the ACRC recommended improvement measures to the Ministry of Land, Infrastructure and Transport (MOLIT) and local governments. MOLIT announced the draft amendments for public comment on the 2nd and 3rd of this month after research projects and forums.

The current enforcement rules stipulate that real estate brokerage fees should be set by ordinances within the overall upper limit rates (0.9% for sales/exchange, 0.8% for leases, etc.). The amendment adjusts the upper limit rates in the enforcement rules to 0.7% for sales/exchange and 0.6% for leases, etc., and then allows actual rates to be set by ordinances within those limits. However, considering regional characteristics, the rates can be set within a range adjusted by plus or minus one-thousandth of the transaction amount from the upper limit rates.

The MOLIT’s draft for public comment includes ▲relaxation of the highest rate ▲segmentation of the high-price range where the current highest rate applies ▲measures to resolve the current reversal phenomenon in brokerage fees between sales and leases for properties priced between 600 million KRW and less than 900 million KRW (lease > sales). An ACRC official explained, "The MOLIT’s draft fully reflects the contents originally recommended by the ACRC and will significantly ease the brokerage fee burden on citizens."

In particular, the current regulation where the rate was "0.9% for sales over 900 million KRW" will change to ▲0.7% for 1.5 billion KRW or more ▲0.6% for 1.2 billion KRW or more but less than 1.5 billion KRW ▲0.5% for 900 million KRW or more but less than 1.2 billion KRW ▲0.4% for 600 million KRW or more but less than 900 million KRW. This has led to both public approval and opposition from brokerage agents. According to the ACRC, most of the 17 metropolitan local governments have submitted implementation plans to revise related ordinances following the MOLIT’s legal amendments. An ACRC official said, "The housing brokerage fee burden for tenants who belong to vulnerable housing groups such as low-income households, young generations, and newlyweds will also be significantly reduced."

The ACRC also recommended raising the compensation liability guarantee amount and specifying the rights and obligations related to the confirmation and explanation of brokerage objects. MOLIT’s draft includes ▲raising the compensation liability guarantee amount ▲imposing the obligation to post business registration certificates at brokerage offices, fully reflecting the ACRC’s recommendations. However, the ACRC plans to actively cooperate with MOLIT to supplement parts that were not accepted, such as the brokerage fee burden upon final contract cancellation.

Yang Jongsam, Director of the Policy Improvement Bureau at the ACRC, said, "With the cooperation of MOLIT and related agencies, the burden of real estate brokerage fees on citizens is expected to be eased soon," adding, "We will continue to actively identify and improve unreasonable systems that cause inconvenience and economic burdens to the public."

According to the ACRC, since the government’s inauguration in May 2017, the ACRC has recommended 216 system improvements to central administrative agencies, local governments, and public institutions. The acceptance rate by related agencies is 98.7%.

This content was produced with the assistance of AI translation services.