Korean Agent Commission: A 940,000 Won Jump at the Bracket Line

Buying a 600 million won apartment through an agent in Seoul carries a commission cap of 2.4 million won. That is the 0.4% ceiling rate for the bracket from 200 million to under 900 million, and VAT is charged on top. Rates are not national: they are set by local ordinance, so they vary by region, and the figures below follow the schedule published by the Seoul Metropolitan Government. The arithmetic is simple; what creates the real burden is the way the amount steps up at each bracket line.

Ceiling rates and caps by bracket, Seoul basis

Sales and exchanges run on one schedule, leases (jeonse and monthly rent) on another. Only the two lowest brackets carry an absolute cap; above them the rate applies with no ceiling amount.

There is an order to reading it. Multiply the transaction amount by the bracket rate first, then check whether the result exceeds the cap where one exists. The official worked example for a 150 million won home sale is 150,000,000 × 5/1,000 = 750,000 won, which sits inside the 800,000 won cap and stands as calculated.

Where 10 million won more costs 940,000 won in commission

Crossing a bracket line does not apply the higher rate only to the excess — the new rate applies to the entire transaction amount. There is no progressive deduction, so a deal that lands just above a line is penalised. Running the numbers shows how tall each step is.

The gap between 890 and 900 million won is 10 million, but the commission cap differs by 940,000 won. At the 1.2 billion line the step is 1.25 million, and at 1.5 billion it is 1.56 million. Across all three, the price rises by 0.8–1.1% while the commission ceiling rises 20–26%. If an asking price sits just above one of these lines, it is also the zone where acquisition tax brackets need checking at the same time.

Above 900 million won, though, the table is not automatically the invoice. The rule is that the client and the licensed agent agree a figure within the ceiling rate, so the rate written into the contract can be lower. Leave that agreement undocumented before signing and the ceiling tends to reappear as the invoice on completion day.

The commission schedule is a ceiling, not a list price. The numbers in the table are the most that can be charged; everything below is negotiating room that has to be settled before the contract.

Where the cap bites before the rate does

In the two capped brackets, the commission stops growing once the amount passes a certain point. Dividing the cap by the rate gives that threshold.

• Sale, under 50m bracket: 250,000 ÷ 0.6% = 41.67m won — above this, the commission is fixed at 250,000 up to 50m
• Sale, 50m–200m bracket: 800,000 ÷ 0.5% = 160m won — from 160m to just under 200m, it is fixed at 800,000
• Lease, under 50m bracket: 200,000 ÷ 0.5% = 40m won — fixed at 200,000 up to 50m
• Lease, 50m–100m bracket: 300,000 ÷ 0.4% = 75m won — fixed at 300,000 up to 100m

One reversal appears here. A 190 million won sale calculates to 950,000 won but is capped at 800,000; a 200 million won sale drops to the 0.4% rate and lands at exactly 800,000. So anywhere from 160 to 200 million won the commission is 800,000 regardless of price, and only above 200 million does it start scaling with the amount again.

How is the transaction amount calculated for monthly rent?

A monthly rent contract converts deposit and rent into a single figure. The base formula is deposit + (monthly rent × 100); if that total comes to less than 50 million won, it is recalculated as deposit + (monthly rent × 70). The lease rate schedule then applies to the converted amount.

The first row is the recalculation rule at work. A 5 million won deposit with 400,000 won rent converts to 45 million, short of the 50 million threshold, so the rent multiplier drops to 70 and the amount becomes 33 million — 165,000 won at 0.5%. Keeping the multiplier at 100 would have produced 225,000 won. A 20 million deposit with 300,000 rent, by contrast, converts to exactly 50 million, so no recalculation applies and the 0.4% rate of the 50–100 million bracket takes over. If the split between deposit and rent is itself in play, it is worth reading this alongside the jeonse-to-monthly conversion rate and its statutory ceiling.

Non-residential property, payment timing, and when nothing is owed

The framework shifts with the type of property. An officetel of 85㎡ or less with its own kitchen, toilet and bathing facilities is charged within 0.5% for sales and 0.4% for leases. Officetels outside those requirements, along with land and commercial premises, are negotiated within 0.9% of the transaction amount. Two otherwise identical officetels can therefore fall under 0.5% or 0.9% depending on area and facilities, which is worth confirming before signing.

On timing, any agreement between the parties governs; absent one, the reference point is the day the transaction price is fully paid. Nothing in the rules supports demanding the full commission at the deposit or interim payment stage. Where a transaction is voided, cancelled or terminated through the agent's intent or negligence, the client owes no commission at all. Charging above the ceiling, or taking money under any other label such as a gratuity or gift, is prohibited and exposes the agent to suspension of licence or of business.

Worth checking

• The local ordinance — rates are set locally. Do not apply the Seoul table to a contract elsewhere without checking that province or city's schedule
• Whether the price sits on a bracket line — just above 900 million, 1.2 billion or 1.5 billion, the ceiling steps up sharply. Factor it in when negotiating price
• Documenting the negotiated rate — above 900 million and for non-residential property, the rule is agreement within the ceiling. Fix the rate and amount in writing before the contract
• Whether VAT is included — it is charged on top of the calculated ceiling. Ask whether a quoted figure is inclusive
• How the officetel is classified — 0.5% if the 85㎡ and private-facility conditions are met, within 0.9% if not
• Joint brokerage — where buyer and seller use different agents, each bills their own client. Check that one side is not invoicing for both
• Payment timing — completion of payment is the default trigger. If full payment is demanded earlier, go back to what was actually agreed

Sources

• Real estate brokerage commission rates — Seoul Real Estate Information Plaza
• Calculating brokerage commission — Korea Easy Law
• Commission rate schedule — MOLIT electronic contract system