Commercial Key Money Calculator

Commercial Key Money Calculator helps estimate Korea-related brokerage, registration, lien, survey, contract, and closing-cost scenarios in English.

Commercial key-money calculator

Uses the Korean key-money model for facility depreciation, business profit multiple, regional location premium, proposed key money, VAT, withholding tax, depreciation, recovery period, and lease-protection converted deposit.

Korean source inputs

Estimated key money

₩167,150,000

Facility, business, and location key money.

Facility key money

₩50,000,000

29.9% of estimate.

Business key money

₩68,000,000

40.7% of estimate.

Location key money

₩49,150,000

29.4% of estimate.

Recovery period

9 months

Risk level safe.

Negotiation verdict

undervalued

-70.1% against estimate.

This English calculator calls the same pure real-estate calculation function used by the Korean page. Inputs and labels are translated; the formula is not replaced by a generic stub.

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Commercial key-money calculator

This guide follows the Korean key-money calculator for facility key money, business key money, location key money, recovery risk, tax, negotiation fairness, and lease-protection limits.

Three-part valuation

Facility key money = facility investment x (1 - elapsed years / useful life). Normal facilities use a 5-year useful life, while restaurants and pubs often use 8 years; over the useful life, facility key money falls to zero.

Business key money uses monthly net profit times a 6 to 12 month multiple: excellent areas use 12 months, normal areas use 10 months, and poor areas use 6 months. Location key money starts from regional averages such as Seoul KRW 49.15 million, Gyeonggi KRW 39.04 million, and nationwide average KRW 34.43 million as of 2024 Q4, then adjusts for commercial grade and competition.

Recovery and negotiation

The Korean guide treats a proposed price within plus or minus 15 percent of the estimate as a fairness band. Recovery risk is safe within 24 months, caution from 24 to 36 months, and danger above 36 months or where profit cannot recover the investment.

Recovery must be read against the remaining lease term. A price can be fair on paper but still risky if the recovery period exceeds the realistic lease duration or if sales are concentrated in a declining area.

Tax and legal protection

Seller tax is modeled as other-income withholding after a 60 percent necessary-expense deduction and a 22 percent withholding rate, which creates an 8.8 percent effective withholding burden. VAT is 10 percent, and goodwill can generally be depreciated over 5 years straight line by the buyer.

Commercial Building Lease Protection Act Article 10-4 protects key-money recovery from 6 months before lease end until termination, and the damages claim limitation period is 3 years from termination. The same converted-deposit limits used by the lease defense calculator should be checked before relying on statutory protection.