Basic Terms
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Jeonse
A Korean-specific lease system where a tenant pays the landlord a large lump-sum deposit and lives rent-free for a set term, with the full deposit refunded at the end.
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- It's specific to South Korea, with no direct equivalent in most other countries β the closest Western concept is simply a security deposit, but jeonse deposits are far larger, often 50β80% of the property's value.
- Landlords commonly invest this deposit elsewhere to earn a return during the lease term.
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Wolse (monthly rent)
South Korea's standard monthly-rent arrangement β a smaller deposit paid up front alongside a fixed rent paid every month, similar to renting in most other countries.
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- The monthly rent amount depends on the deposit size β generally, the larger the deposit, the lower the monthly rent.
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Ban-jeonse (semi-jeonse)
A Korean-specific hybrid lease that combines a partial jeonse-style deposit with a smaller monthly rent on the remaining balance.
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- It's become more common as it fits both tenants who can't afford a full jeonse deposit and landlords who want a monthly income stream.
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Sale (maemae)
A transaction where full ownership of a property changes hands, unlike a lease (jeonse or wolse), where ownership stays with the landlord.
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LTV (Loan-to-Value ratio)
The percentage of a property's value that a lender will allow you to borrow β a core factor in determining your loan limit, used in mortgage lending worldwide.
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- Example: an LTV of 70% on a $600,000 home means you could borrow up to $420,000.
- The allowed ratio varies by regulated-area status, how many homes you already own, and whether it's your first home purchase.
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DTI (Debt-to-Income ratio)
The ratio of your annual mortgage payment plus other debt interest to your annual income β a standard measure lenders use to assess repayment capacity.
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DSR (Debt Service Ratio)
The ratio of your total annual debt repayments β mortgage plus all other loans like personal loans and credit lines β to your annual income, a stricter measure of repayment capacity than DTI.
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- It's currently the single most influential lending regulation in South Korea's mortgage market; similar comprehensive debt-to-income checks are used by lenders in many other countries as well, even where they don't go by the same name.
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Property register (deungibu deungbon)
South Korea's official document recording a property's full ownership and lien history, available for anyone to look up through the government's online registry office.
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- It's comparable to a title deed or land registry search used in many other countries. Always check it before signing a lease or purchase to confirm the true owner and any existing mortgages or liens.
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Officially assessed land value
A land value that South Korea's government calculates and publishes each year, used as the basis for property tax and other tax calculations.
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- It is typically set lower than the actual market price. Many other countries use a similar government-assessed value for property tax purposes, though the exact methodology differs.
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Actual transaction price
The real price at which a sale was completed β in South Korea, publicly searchable through the government's real-transaction-price disclosure system.
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Exclusive floor area
The floor area an individual unit uses exclusively β inside the front door, covering the living room, bedrooms, kitchen, and bathroom, similar to a unit's net internal area in other markets.
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- A commonly advertised size, "the standard 84 mΒ² unit," refers to an exclusive area of about 84 mΒ² (roughly 900 sq ft).
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Supply (gross) floor area
Exclusive floor area plus a share of common areas like stairwells and hallways β the figure typically advertised for a unit's overall size, comparable to gross floor area elsewhere.
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- Two units advertised at the same overall size can have different exclusive areas, so it's important to check the exclusive area separately before signing.
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Floor area ratio (FAR)
The ratio of a building's total floor area across all stories to the lot size β a higher FAR allows a taller, denser building on the same land, a concept used in zoning worldwide.
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- It's a key metric when assessing how profitable a redevelopment project could be.
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Building coverage ratio (BCR)
The ratio of a building's ground-floor footprint to the lot size β a lower BCR leaves more open space around the building for landscaping or parking.
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Property appraisal
A formal valuation of a property's objective worth performed by a licensed appraiser, used to set loan limits or reference prices in a redevelopment or auction.
Deal & Contract Terms
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Holding deposit
A small amount paid up front, before the formal contract is signed, to reserve a property.
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- Since its legal status is often unclear, disputes are common β it's safest to put the refund conditions in writing, whether by text message or a short written agreement.
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Contract deposit
The payment made when signing the formal contract, typically around 10% of the sale price or lease deposit.
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- By common practice, if the buyer/tenant backs out afterward, they forfeit this deposit; if the seller/landlord backs out, they typically must repay double the deposit as compensation.
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Interim payment
An additional payment made between the contract deposit and the final balance, mainly used in larger sales or pre-sale (off-plan) contracts.
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- Once an interim payment has been made, the contract generally cannot be unilaterally canceled.
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Balance (final payment)
The remaining amount owed after the deposit (and any interim payment) β ownership transfer or move-in happens on the day the balance is paid.
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Special terms
Additional conditions the parties agree to beyond the standard contract clauses, written directly into the contract.
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- The more specifically you spell out common friction points β who pays for repairs, whether pets are allowed, move-in cleaning β the fewer disputes you're likely to have later.
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Fixed date (hwakjeong ilja)
A Korean legal procedure where a public office stamps a lease contract to officially certify the date it was signed.
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- Getting a fixed date together with resident registration is what gives a tenant priority repayment rights on their deposit if the property is later foreclosed β a specific protection under South Korea's tenant-protection law, though many other countries have their own separate systems for protecting rental deposits.
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Resident registration (move-in report)
An administrative procedure in South Korea for registering your new address after moving, a critical step for protecting a tenant's legal rights.
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- Completing resident registration and getting a fixed date as soon as possible after moving in is the most basic way to protect your deposit.
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Lease registration order
A South Korean court procedure that lets a tenant who hasn't gotten their deposit back after the lease ends move out while still keeping their existing legal priority and repayment rights.
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Mortgage lien
A lien a bank or lender places on a property to secure a loan it has made β shown in the property register's section on encumbrances, similar to a mortgage lien recorded on a property in most countries.
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- The larger the lien amount, the greater the risk that a tenant won't get their full deposit back if the property is foreclosed.
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Senior vs. junior liens
When a property has multiple claims against it (mortgages, lease rights, etc.), they are repaid in the order they were registered β earlier claims are senior, later ones are junior.
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- In a foreclosure, junior creditors may not get their deposit back in full if the property's value falls short, so checking the size of senior claims before signing is essential.
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Underwater jeonse ("empty can" jeonse)
A Korean-specific term for a property where the market price is lower than or close to the jeonse deposit plus outstanding loans, meaning a tenant risks not getting their full deposit back if the property is foreclosed.
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- Before signing, check the size of any existing mortgage via the property register and the market price via the actual transaction price system to gauge this risk. This specific risk arises from South Korea's jeonse system, though it's conceptually similar to a landlord being 'underwater' or having negative equity in other markets.
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"Gap" investment
A South Korea-specific investment strategy that relies on the jeonse system: buying a property using only the small gap between its sale price and its jeonse deposit as your own capital, betting on future price appreciation.
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- If home prices fall, this can leave the owner unable to repay the jeonse deposit, leading to an underwater-jeonse situation for the tenant.
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Housing Lease Protection Act
South Korea's law protecting tenants' rights, covering protections like priority repayment rights, priority claim rights, and the right to request a lease renewal.
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- Most countries have their own separate tenant-protection laws with different specific rules, so always check the framework that applies where you're renting.
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Rent increase cap
A South Korean rule that caps how much a landlord can raise the rent (jeonse or wolse) when renewing an existing lease β currently capped at 5% above the previous contract.
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- Many other jurisdictions have their own rent-control or rent-increase-cap rules with different limits.
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Right to request lease renewal
A right under South Korean law letting a tenant request one additional two-year extension when their lease term ends.
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- A landlord can refuse the renewal if they have a legitimate reason, such as moving into the property themselves.
Tax & Policy Terms
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Acquisition tax
A one-time local tax paid in South Korea when acquiring real estate through purchase, inheritance, or gift, with the rate varying by property price and how many homes the buyer already owns.
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Capital gains tax on real estate
A South Korean national tax owed on the profit (capital gain) earned when a property is sold for more than its purchase price.
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- The rate and available deductions vary significantly based on holding period, whether it's a household's sole home, and how many homes the seller owns.
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Comprehensive Real Estate Holding Tax
A South Korean national tax levied annually, on top of property tax, on owners of high-value homes above a set threshold or on multiple-home owners.
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Property tax
A local tax levied annually on owners of land, buildings, and homes, calculated based on the officially assessed value.
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One-home-per-household exemption
A South Korean tax benefit that exempts a household from capital gains tax, up to a set amount, when it sells its only home after meeting certain ownership and residency period requirements.
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Multiple-home-owner tax surcharge
A South Korean policy that applies higher tax rates on acquisition tax, capital gains tax, and the comprehensive holding tax to owners of two or more homes, with the surcharge intensity frequently adjusted by government policy.
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Subscription scoring system
A South Korean system for allocating new-apartment sale units by scoring applicants on factors like years without owning a home, number of dependents, and how long they've held a housing subscription savings account, with the highest scorers winning.
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Housing subscription savings account
A South Korean savings product you must hold to be eligible to apply for a new apartment sale, where the length of enrollment and number of deposits made affect your odds of winning.
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Redevelopment excess-profit recoupment
A South Korean policy that claws back a portion of the profit a redevelopment project's members earn above a set threshold, as a government levy.
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LH (Korea Land & Housing Corporation)
A public corporation under South Korea's Ministry of Land, Infrastructure and Transport responsible for building and supplying public housing and developing residential land, to support national housing stability.
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Pre-sale price cap
A South Korean policy that directly regulates the maximum sale price of new apartments, aimed at easing the cost burden for non-owning buyers looking for their first home.
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End-user buyer
A term for someone buying a home to actually live in, rather than as an investment β often given preferential treatment in South Korean subscription, lending, and tax policy.
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