South Korean real estate: Loan criteria and brokerage fee clarifications

South Korean real estate policies and consumer practices are seeing significant adjustments. Regarding the Newborn Special Loan, while the income threshold for dual-income couples has been expanded to 200 million won, this relaxation applies only to new home purchases. For existing homeowners seeking to refinance (debt conversion), the income limit remains capped at 130 million won. Furthermore, the 1% interest rate tier is strictly reserved for households with a combined income of 85 million won or less; those in the newly expanded income bracket will face higher rates between 3.6% and 4.3%.

In the real estate brokerage sector, consumers are being advised that official fee schedules represent maximum limits rather than fixed prices. Additionally, there is a distinction in Value-Added Tax (VAT) requirements: while general taxpayers can charge 10% VAT, simplified taxpayers (those with annual sales under 104 million won) should only charge approximately 4%. Charging a 10% VAT as a simplified taxpayer is considered a violation of excess fee prohibitions.