Real Estate Brokerage Fees Cut by Up to Half Starting from the 19th

Enforcement Rules of the Licensed Real Estate Agent Act Amendment to Take Effect on the 19th

Property listings are posted at a real estate agency in Songpa-gu, Seoul. Photo by Mun Honam munonam@

From the 19th, real estate brokerage fees will be reduced by up to half. The lowered fees will apply to transactions where contracts are signed on or after this date.

The Ministry of Land, Infrastructure and Transport announced on the 15th that the amendment to the Enforcement Rules of the Licensed Real Estate Agents Act, which includes these changes, will be promulgated and enforced on the 19th after undergoing regulatory review and legal inspection.

The revised brokerage fee rates will apply from the time contracts for sales, exchanges, leases, and other agreements are concluded after the amendment takes effect. For housing sales, the reduced brokerage fees apply to transactions of 600 million KRW or more, and for Jeonse and monthly rent transactions, to those of 300 million KRW or more. Transactions below these amounts will continue to be charged at the existing rates.

For example, if an apartment priced at 900 million KRW is sold, the maximum brokerage fee will decrease from the previous 8.1 million KRW to 4.5 million KRW. Also, for a Jeonse contract on a 600 million KRW apartment, the maximum fee will drop from 4.8 million KRW to 2.4 million KRW.

However, since these are maximum fee rates, consumers can negotiate with licensed real estate agents before signing the contract to set brokerage fees within the upper limit.

During the prior legislative notice, it was proposed that local governments could adjust fees within a range of plus or minus 1/1000 of the transaction amount through city or provincial ordinances, considering regional characteristics. However, this clause was removed after local governments expressed concerns that the ordinance amendment process could cause additional conflicts.

The frontline brokerage industry, including the Korea Association of Licensed Real Estate Agents, strongly opposes the reform plan, raising concerns that conflicts may escalate in the future.

Han Jeong-hee, Director of the Real Estate Industry Division at the Ministry of Land, Infrastructure and Transport, said, "We ask for active cooperation from the industry and local governments to ensure that the changed brokerage fee rates are stably applied in the real estate brokerage market and to prevent market confusion."