Transferring ownership of a Seoul home with a taxable standard value (sigapyojunaek) of 500 million won requires purchasing 13 million won of National Housing Bonds (gukmin jutaek chaegwon). Sell them straight back at the counter on a day when the discount rate is 10%, and the amount actually leaving the account is 1.3 million won. It sits quietly beside acquisition tax, brokerage fees and the judicial scrivener's bill — yet it rivals the brokerage fee in size.
The purchase amount is not negotiable; it is the taxable standard value multiplied by a fixed rate. The out-of-pocket cost is that amount multiplied by the day's discount rate. Two multiplications, and the second number changes daily.
Purchase amount = valuation × purchase rate
Anyone filing a transfer-of-ownership registration after buying a home must, as a rule, purchase these bonds. The same applies to ownership received through inheritance or gift. The bonds are issued by the government under the Housing and Urban Fund Act to finance national housing projects.
The calculation multiplies the taxable standard value by a rate that varies by region and value band. The residential rates published by Korea's Easy Law Information service are below. The taxable standard value is an assessment-based figure rather than the actual transaction price, so it typically lands below what was paid.
| Taxable standard value | Seoul & metropolitan cities | Other regions |
|---|---|---|
| 20m-50m won | 13/1,000 | 13/1,000 |
| 50m-100m won | 19/1,000 | 14/1,000 |
| 100m-160m won | 21/1,000 | 16/1,000 |
| 160m-260m won | 23/1,000 | 18/1,000 |
| 260m-600m won | 26/1,000 | 21/1,000 |
| 600m won and above | 31/1,000 | 26/1,000 |
A detached house in Seoul valued at 200 million won falls in the 160m-260m band, so 23/1,000 applies and the purchase amount is 4.6 million won. Land carries its own, higher schedule of rates.
What actually leaves the account
Buyers without the cash to hold the bonds to maturity sell them back at the bank counter on the spot. They fetch less than face value, and that gap is the out-of-pocket cost. The formula, as set out by KB Kookmin Bank, is simple.
Out-of-pocket cost = bond purchase amount × discount rate
On a purchase of 13 million won with a 4% discount rate, the cost is 520,000 won. The difficulty is that the rate moves every day, which is why the figure quoted in a registration estimate often differs from what is finally settled.
The table below applies the rate schedule above to a range of valuations, then applies a flat 10% discount rate to compute the out-of-pocket cost directly. Region alone shifts the burden on identically priced homes.
| Taxable standard value | Seoul purchase (m won) | Seoul cost (m won) | Other regions purchase (m won) | Other regions cost (m won) |
|---|---|---|---|---|
| 150m won | 3.15 | 0.315 | 2.40 | 0.240 |
| 200m won | 4.60 | 0.460 | 3.60 | 0.360 |
| 300m won | 7.80 | 0.780 | 6.30 | 0.630 |
| 500m won | 13.00 | 1.300 | 10.50 | 1.050 |
| 800m won | 24.80 | 2.480 | 20.80 | 2.080 |
| 1.2bn won | 37.20 | 3.720 | 31.20 | 3.120 |
At a 1.2 billion won valuation in Seoul, the required purchase is 37.2 million won and a 10% discount rate turns that into 3.72 million won of real expense. Read alongside how brokerage fees step at the 900m, 1.2bn and 1.5bn won thresholds, the shape of the cash needed at acquisition becomes clearer.
The law sets the purchase amount. The bond market that morning sets what it costs you.
Why the discount rate moves daily
The discount rate mirrors the bond's price. When market yields rise, a bond paying a low coupon falls in price, the gap against face value widens and the discount rate climbs. Falling yields do the reverse.
The immediate-sale burden typically runs 8-13% of the purchase amount, stretching to 13-17% when rates are rising and compressing to 5-8% when they are falling, according to House114. Applied to a 13 million won purchase — a 500 million won Seoul valuation — that range looks like this.
| Discount rate | Out-of-pocket cost (m won) | Rate environment |
|---|---|---|
| 5% | 0.650 | Easing cycle, low end |
| 8% | 1.040 | Normal, low end |
| 10% | 1.300 | Normal, middle |
| 13% | 1.690 | Normal high / tightening low |
| 17% | 2.210 | Tightening cycle, high end |
Same house, same registration, and the cost swings from 650,000 to 2.21 million won. The 1.56 million won spread equals 12% of the purchase amount — reason enough to check the day's rate if the registration date has any flexibility. Current rates are published under the "sale price and discount rate" menus at the Housing and Urban Fund and at banks.
The figures are not set arbitrarily. Prices reported by the small-lot bond dealer securities firms are collected by the Korea Exchange, the top 10% and bottom 20% are discarded, and the remainder is averaged.
Holding to maturity costs nothing
Immediate sale is a choice, not an obligation. Buyers with spare cash can simply keep the bonds, in which case no out-of-pocket cost arises and the principal plus interest arrives in a securities account at maturity.
The terms deserve scrutiny, though. Type 1 National Housing Bonds carry a pre-tax coupon of 1.0% a year as of 16 July 2026, maturing five years from issue. The law allows one-, three- and five-year issues, but five-year paper is what circulates today, as Namuwiki records.
Locking 13 million won away at 1.0% for five years yields roughly 650,000 won before tax. The same sum in a 3% deposit would produce about 1.95 million won, an opportunity cost of 1.3 million won — coincidentally close to the immediate-sale cost at a 10% discount rate. The decision turns on available cash and how a five-year lock-up is valued.
Claims after maturity are also time-limited: principal must be claimed within five years of maturity and interest within two, after which the money reverts to the national treasury. Anyone choosing to hold should record the maturity date somewhere durable.
Central and local government bodies and statutory public institutions are exempt from the purchase requirement, as are religious organisations, social welfare corporations and school foundations registering property for their designated purposes.
What to check
- The taxable standard value — not the purchase price. Sitting on a band boundary changes the rate itself.
- Region classification — on a 500 million won home, the Seoul versus other-region gap is 2.5 million won of bonds and 250,000 won of cost.
- The discount rate on registration day — check the Housing and Urban Fund or a bank's sale price and discount rate menu.
- The line item in your estimate — a scrivener's quoted bond cost is an estimate at the rate prevailing when it was drafted, and settlement may differ.
- Hold versus sell — weigh 1.0% over five years against five years of opportunity cost.
- Combined with acquisition tax — first-home acquisition tax relief and multi-home surcharge status move total cash at acquisition far more than this line does.