Real estate brokerage commission cut in half in Seoul

Following the suit of Gyeonggi Province and Incheon and Daegu, Seoul has decided to cut the real estate brokerage commission rate in half.

The Planning Management Committee of the Seoul Metropolitan Council approved on Friday a revised bill, which stipulates to lower the real estate brokerage commission rate from below 0.9 percent to below 0.5 percent of the purchase price in sales of houses worth between 600 million won and 900 million won (approx. between 548,400 dollars and 822,600 dollars).

The city council also revised the bill to reduce the brokerage commission rate from current 0.8 percent to 0.4 percent for leases worth between 300 million won and 600 million won (approx. between 274,200 dollars and 548,400 dollars). Accordingly, a tenant who rents a house for 300 million won (274,273 dollars) pay only less than 1.2 million won (1,097 dollars) for the brokerage commission, which was 2.4 million won (2,194 dollars) at maximum before revision of the bill.

Lee Won-geun at the Seoul City Real Estate Management Team explained, “People have raised many complaints over the commission rates in the sale and lease price ranges where the council decided to lower brokerage commission rates.” Seoul`s recent decision is expected to make a big impact to other local autonomous entities such as Daejeon and Sejong Cities and South Gyeongsang Province whose offices are also discussing the same issue.

irontiger@donga.com