How much farmland rent remains after fees and costs?
Compare a lease entrusted to the Korea Rural Community Corporation (KRC) through Farmland Bank with a direct lease over the same term.
The calculator deducts rent-free vacancy, entrusted fees and annual owner costs to show net rent before tax.
It is useful for retiring owners, families managing inherited farmland and owners reviewing a direct-lease renewal.
A higher quoted annual rent may be offset by tenant-search gaps and repeated management or travel costs.
Farmland pension payments depend on a separate secured-finance arrangement; this tool compares lease cash flows.
Use the statement to check the scope of both offers before making a contract decision.
Korea-based calculator using rules checked on 2026-09-17 and amounts in KRW.
It does not determine farmer status, eligibility for entrustment, legality of a direct lease, tax liability or approval of a contract.
Distinguish the 2026 exemption from the statutory ceiling
Confirmed farmer exemption
The Ministry of Agriculture, Food and Rural Affairs (MAFRA) explains in its 2026 guidance that farmer owners entrusting farmland receive a lease-trust fee exemption.
Select the exemption only after KRC confirms that it applies to your circumstances.
The model then uses 0%; age, land area or ownership alone does not establish farmer status or retroactive entitlement.
Contract rate and legal limit
Annex 1 to the Enforcement Decree of the Korea Rural Community Corporation and Farmland Management Fund Act limits lease-trust fees to 12% of total rent.
This is a ceiling, not the operational rate charged to every owner.
Enter your confirmed final contract rate, including any confirmed renewal or upfront-payment adjustment.
If the fee is unknown, keep the unconfirmed mode.
Its 0–12% boundaries produce conditional net-rent ranges, not a forecast fee or guaranteed receipt.
The 5% rate in the worked example is a fictional contract quotation and is never applied as a general default.
Use whole-plot annual amounts
Area and term
Area is entered in square metres and only converts annual net rent to a per-m² figure.
Zero area hides that result and never triggers an exemption.
Article 19-7 of the Enforcement Decree requires an entrusted lease term of at least 5 years.
The tool accepts 5–30 years; 30 is a product limit, not a statutory maximum.
Annual rent and vacancy
Enter the full 12-month rent without vacancy for the entire plot, not a per-area quote.
Vacant months mean months without rent in every year of the comparison.
A single initial gap is different from this recurring assumption, and a non-growing season is not automatically rent-free if an annual lease remains in force.
Set entrusted and direct vacancy separately using consultation evidence.
Owner costs
Include annual management, travel and other expenses actually borne by the owner.
Exclude tenant-paid costs and the trust fee calculated separately to avoid double counting.
Annual costs remain payable in full during vacancy, allowing negative net income where expenses exceed receipts.
Formulas and rounding
- Rent after vacancy = annual rent × (12 − vacant months each year) ÷ 12
- Annual entrusted fee = rent after vacancy × confirmed rate ÷ 100
- Entrusted annual net = rent after vacancy − entrusted fee − owner costs
- Direct annual net = direct rent after vacancy − direct owner costs
- Term total = annual amount × comparison years
Rent after vacancy is rounded to whole won first, followed by the annual fee.
The annual statement repeats these amounts so its fee sum matches the term total.
Negative net income is retained rather than replaced by zero.
Confirm the settlement basis with KRC if a fee is assessed on rent before vacancy, collected upfront or subject to other settlement adjustments; this model uses rent after vacancy.
Step-by-step use
- Obtain entrusted and direct quotes for the same farmland and scope, then enter area and a common comparison term.
- Enter full-year rents and recurring rent-free months separately; KRC management does not automatically mean zero vacancy.
- Add owner costs and choose the confirmed exemption or contract rate; leave the fee unconfirmed when evidence is missing.
- Review net differences and vacancy break-even, then vary vacant months to see whether the comparison changes.
- Save the inputs and results as CSV and take them to a Farmland Bank consultation to verify fees, tenant placement, payment timing and direct-lease legality.
Worked example: the higher rent has a small net advantage
Assume a fictional 3,000 m² plot and a 5-year comparison.
Entrusted annual rent is KRW 3,000,000, with no vacancy, KRW 100,000 owner costs and a confirmed 5% fee.
Direct annual rent is KRW 3,300,000, with one vacant month each year and KRW 200,000 owner costs.
These are calculation inputs, not market prices or a KRC quotation.
Fictional five-year farmland lease comparison in KRW| Item | Entrusted (KRW) | Direct (KRW) |
|---|
| Annual rent after vacancy | 3,000,000 | 3,025,000 |
| Annual trust fee | 150,000 | Not applicable |
| Annual owner costs | 100,000 | 200,000 |
| Annual net rent | 2,750,000 | 2,825,000 |
| Five-year net rent | 13,750,000 | 14,125,000 |
| Five-year trust fees | 750,000 | Not applicable |
Although direct rent is KRW 300,000 higher before adjustments, its net advantage is only KRW 75,000 a year.
With a confirmed farmer exemption, entrusted net becomes KRW 2,900,000 a year and KRW 14,500,000 over five years, exceeding direct net by KRW 75,000 a year.
Unconfirmed fees produce statutory boundary scenarios of KRW 2,540,000–2,900,000 annual net and KRW 12,700,000–14,500,000 over five years.
Interpreting vacancy break-even
Direct vacancy break-even = 12 × [1 − (entrusted annual net + direct annual costs) ÷ direct annual rent]
This holds entrusted vacancy and costs fixed while solving for the recurring direct vacancy that makes net amounts equal.
The example reaches approximately 1.273 months at the 5% fee and 0.727 months with exemption.
More direct vacancy increases the relative benefit of entrustment.
This continuous monthly approximation is not a forecast of seasonal farm earnings or payment dates, and whole-won rounding may slightly affect equality at the threshold.
A threshold below zero means entrusted net is higher even without direct vacancy.
A threshold above 12 means entrustment does not become better within a full year of direct vacancy.
When direct annual rent is zero, there is no division by zero; the output compares the net amounts regardless of vacancy.
Unconfirmed fee mode shows thresholds for both the lower and upper entrusted net scenarios.
Retirement, inheritance and renewal scenarios
Retirement cash planning
Annual net rent can inform a living-expense budget but does not imply monthly receipts.
Annual or deferred payment schedules may require a separate cash reserve.
Increase vacancy to check whether recurring owner costs remain affordable.
Inherited land or renewal
For owners living far away, include small but repeated travel and management costs.
Compare retaining an existing tenant with finding a new tenant using different vacancy assumptions.
Keep contract evidence and the exemption confirmation together because changing the fee alone can reverse the comparison.
Checks outside the numerical comparison
- Article 23 of the Farmland Act sets rules and exceptions for farmland leases.
A numerical advantage does not establish permission to lease directly.
- Confirm eligible farmland, tenant selection, termination provisions, fee assessment and payment dates with KRC.
The output does not guarantee a tenant or collection of arrears.
- Taxes, capital-gains treatment, farmland pensions, direct payments, financing, restoration and early termination are excluded.
Net after a tax return may differ from this before-tax figure.
- No future rent growth or regulatory change is automatically applied.
If conditions vary by year, review those periods separately against the actual settlement statement.
Frequently asked questions
Are all farmland owners exempt?
No.
KRC must confirm whether the farmer exemption described in the 2026 guidance applies to the owner.
Selecting this mode does not establish eligibility.
Is 12% the actual Farmland Bank fee?
It is the ceiling in Annex 1 to the Enforcement Decree.
Use the actual confirmed contract rate and discounts; the boundary range is not an expected invoice.
Can I use this for a free-use entrustment?
This tool covers paid lease entrustment.
Free-use and sale entrustments have different fee structures and must not use this rental percentage model.
Does one vacant month occur only once over five years?
It is repeated every year.
A single initial gap or arrears in a specific year needs a separate statement instead of this fixed annual assumption.
Does a small land area automatically trigger an exemption?
Area is used only for per-area net rent.
Confirm any small-plot or renewal relief with KRC before selecting exemption or entering a final rate.
Why is my net rent negative?
Owner costs and fees exceed rent after vacancy.
Check whether an expense belongs to the tenant or has been entered twice.
Does the five-year result guarantee future rules?
It repeats current inputs as a nominal scenario.
Future exemption or unchanged fee rates are not guaranteed; recheck before renewing.
How should I use the result?
The CSV records rent, costs, fee mode and unresolved conditions with the results.
Use it to confirm contract terms and settlement details at a Farmland Bank branch.
Official sources and rule dates
Sources were checked on 2026-09-17 through the National Law Information OPEN API and MAFRA guidance.
The KRC Act version is effective 2026-07-07, its Enforcement Decree 2026-01-02, and the Farmland Act 2026-09-15.
Annex 1 has identifier 17856493; exemption information comes from the MAFRA notice of 2026-06-18 and must be matched to the individual contract.
Save your statement and verify the contract
Use the CSV button above to retain inputs and results together.
Contact Farmland Bank or call 1577-7770 in Korea to check exemption status, the actual fee, payment dates and entrustment eligibility.
For a separate secured retirement-income arrangement, review the farmland pension calculator.