Closing Costs When Buying Property in Korea

The cash a Korean property purchase needs is not the price minus the mortgage.

On completion day, alongside the balance owed to the seller, several things fall due at once: acquisition tax, local education tax, sometimes rural special tax, the estate agent’s fee, the loss on discounting national housing bonds, the registration costs, the judicial scrivener’s fee, and stamp duty.

How much you can borrow, and how LTV and DSR are calculated, is a separate question — that is getting a mortgage in Korea. This guide is only the cash the loan will not cover.

Do not run the account to zero on completion day. Two of these numbers are not final until the morning itself.

Acquisition tax is the big one

For an individual acquiring housing for consideration, the base rate moves with the price:

Local education tax comes on top, and rural special tax applies in some cases. For a standard home in the 1% band, local education tax normally adds 0.1% of the price.

Rural special tax is where floor area decides it. At an exclusive floor area of 85㎡ or under, an ordinary home is not charged it. Above 85㎡, an ordinary single-home acquisition can pick up a further 0.2%.

So the same ₩500,000,000 home is two different tax bills:

Owners of more than one home, and companies, are on a separate and heavier schedule. A company acquiring housing, or an additional home in a regulated zone, can leave the 1–3% range entirely.

The scrivener’s invoice is not the scrivener’s fee

Most buyers hand the ownership transfer registration to a judicial scrivener, to be done at the moment the balance is paid.

That is not a tax, and the total you transfer to them is not their charge. A typical invoice combines:

Ask for those separated before completion, and keep the tax receipts, the bond calculation and the registration fees as distinct documents afterwards. On an ordinary apartment around ₩500,000,000 the fee and disbursements often land in the several-hundred-thousand-won range, varying with difficulty and region — there is no single national statutory scale.

The agent’s fee is a ceiling, not a price

Housing sales have maximum brokerage rates by transaction band, and the actual fee is agreed within that maximum between the client and the agent. In Seoul:

A ₩500,000,000 apartment sits in the 0.4% band, so the ceiling is ₩2,000,000. You can negotiate below it — the number is a limit on what may be charged, not a tariff.

Where the agent is a standard-regime taxpayer, VAT can be charged on top. Settle whether the quoted figure includes VAT at contract stage: a ₩2,000,000 fee with 10% added is ₩2,200,000 in actual cash.

The housing bond does not cost you its face value

This is the line most misread on a completion statement.

Registering ownership of certain property requires you to buy First-Class National Housing Bonds. The purchase amount is calculated from the published assessed value, not the price you paid, at a rate that moves with that value and with where the property is:

A Seoul home assessed at ₩500,000,000 sits in the fifth band:

₩500,000,000 × 26/1,000 = ₩13,000,000 of bonds to buy

That ₩13,000,000 is not a cost. In practice buyers rarely hold the bonds; they sell them the same day at the registration counter. What you actually lose is the discount on that immediate sale:

₩13,000,000 × 8.5% ≈ ₩1,105,000

Where that discount comes from is the part nothing explains. The bond pays 1.0% a year over five years, compounded annually and repaid in one sum at the end. When the market wants more than 1.0% to hold five-year paper, nobody buys it at face value — and the gap between what it pays and what the market wants is the discount. So the discount is not a fee anyone charges you. It is the price of getting out of a below-market bond immediately instead of waiting five years.

That coupon has moved a great deal: 3.00% until mid-2012, down to 1.00% by August 2019, up to 1.30% in December 2022, back to 1.00% from April 2025. Its full history is tracked here.

One thing to ignore: if a guide mentions a Second-Class National Housing Bond, it is out of date. Issuance of those stopped on 31 May 2013.

Two things follow, and both matter on the day:

Stamp duty, and who is supposed to pay it

The Stamp Tax Act treats a document transferring ownership of real property as taxable. Where the stated amount is over ₩100,000,000 and up to ₩1,000,000,000, the stamp duty is ₩150,000. A ₩500,000,000 apartment contract sits in that band.

Where two or more parties draw up the document together, liability is joint. In practice buyer and seller often split it, but the law does not prescribe ₩75,000 each. Budget the full ₩150,000 on the buyer’s side and treat any split as a saving rather than an assumption.

What a ₩500,000,000 purchase actually needs in cash

Assuming: Seoul, one home after purchase, 85㎡ or under, agent fee at the cap, agent on the standard VAT regime, assessed value taken as ₩500,000,000 for illustration, a discount rate around 8.5%, and no first-time-buyer relief.

If the assessed value is below the purchase price the bond cost falls. If you negotiate the agent’s fee below the cap it falls again. Go over 85㎡ and rural special tax adds roughly ₩1,000,000, taking the total to about ₩10,455,000–10,755,000.

The same headline price does not produce the same closing cost twice.

Leave a margin in the account on completion day

Structure the completion money as its own set of buckets rather than one figure:

Your share of the purchase price
+ acquisition tax and the taxes with it
+ agent fee
+ housing bond discount
+ scrivener and registration
+ stamp duty
+ a reserve

Matching the loan drawdown and your own funds to the last won, and running the balance down to nothing, is the mistake. The bond discount rate can move, a floor-area or homes-held judgement can change the acquisition tax, and registration disbursements can be added.

Get an estimate from the scrivener before contract, then recalculate acquisition tax, the bond cost and registration two or three days before completion.

For a ₩500,000,000 apartment — one home, 85㎡ or under, Seoul, no relief — plan on roughly ₩9,500,000 to ₩10,000,000 in closing cash, held separately from the loan and from your share of the price.