SEOUL, Sept. 3 (Korea Bizwire) — Starting from next month, the government will lower the real estate brokerage commission cap.
The Ministry of Land, Infrastructure and Transport announced on Thursday that it will issue an advance legislation notice on the revised enforcement ordinance of the Real Estate Agents Act by Sept. 16.
The brokerage commissions on real estate sale and purchase deals, which are linked to property transaction prices, have surged in recent years along with the hike in housing prices.
The revised brokerage commission system will have an upper cap on the rate rather than using a fixed rate. The parties in the transaction can negotiate the rate within the cap limit.
When it comes to real estate sale and purchase transactions worth less than 600 million won (US$518,800), the current cap limit will remain unchanged. Transactions worth more than 600 million won, however, will have a changed rate system.
The brokerage commission on deposit rent contracts worth more than 300 million won will also be lowered from the current level.
Under the revised system, the highest level of brokerage commission on real estate sale and purchase transactions worth 900 million won will be lowered from the current 8.1 million won to 4.5 million won, while the maximum brokerage commission on jeonse transactions worth 600 million won will be cut from the current 4.8 million won to 2.4 million won.
Jeonse refers to a unique Korean system in which renters give landlords a large returnable deposit instead of paying monthly rent.
Ashley Song (email@example.com)