What this Korean jeonse-fraud decision calculator compares
A tenant whose leased home enters a court auction after jeonse fraud may have to compare two very different financial paths.
The first path is to receive the court distribution and move to alternative housing.
The second path is to use the statutory preemptive-purchase right, acquire the victim home at the auction price, finance the closing, hold the property, and eventually sell it.
Comparing only the auction price with the original deposit misses most of the decision.
Direct purchase converts part of the deposit claim into an ownership position, but it also creates a bid-deposit requirement, closing cash, acquisition and registration costs, repairs, loan payments, holding costs, and sale risk.
Distribution-only avoids those acquisition obligations, but the court distribution may be far below the deposit and the tenant may continue paying rent or other housing costs elsewhere.
This tool places both paths on the same analysis horizon and discounts their future cash flows to the same valuation date.
Preemptive-purchase path
- Court-notice bid deposit and cash still due at closing
- Only the offset amount confirmed for the court procedure
- Loan payment, remaining balance, and available cash
- Tax, registration, repair, holding, and eventual sale costs
Distribution-only path
- Distribution pool after enforcement costs and verified senior claims
- Unrecovered part of the original lease deposit
- Relocation and brokerage costs
- Alternative monthly housing cost over the same horizon
A positive purchase advantage means that the modeled present value of direct purchase is higher under the entered assumptions.
A negative value means that distribution-only is higher under those assumptions.
Neither result is a legal recommendation, a bid instruction, or a prediction of what the court, lender, tax office, or future property market will decide.
Rule date, temporary statutes, and scope
The rule date is August 29, 2026.
The current temporary validity date of the Special Act is May 31, 2027, and the current acquisition-tax relief sunset is December 31, 2026.
Recheck the law in force on the filing and acquisition dates because either deadline may be amended.
The relevant statute is the Special Act on Support for Jeonse Fraud Victims and Housing Stability.
This English guide uses the short expression Special Act, while the calculator uses victim status to mean a formal determination under the statutory process rather than a user’s own assessment of fraud.
Article 2 links victim status to the Article 3 requirements and a determination by the Ministry of Land, Infrastructure and Transport after committee review.
Article 14 governs the determination procedure and decision document.
Under the current May 20, 2025 amendment provisions, the temporary Act’s coverage also uses May 31, 2025 as the cutoff for the first lease agreement, so the formal determination and contract date must be checked together.
The calculator does not test the Article 3 criteria, determine whether the leased home is a victim home, or decide whether the user filed within every procedural deadline.
The user must already have the determination document and must match it to the property and court case.
The calculator also limits its acquisition comparison to a court auction.
Public-sale procedures, public-housing acquisition, and assignment of the right to a public housing operator require separate analysis.
Legal checkpoints and calculator boundaries| Checkpoint | Primary evidence | Calculator treatment | Main article |
|---|
| Formal victim determination | Government decision document | User confirmation only | Article 14 |
| Direct preemptive purchase | Court sale notice and case record | User-entered price and deposit | Article 20 |
| Public-housing acquisition | Operator review and acquisition guidance | Outside this two-path model | Article 25 |
| Purchase-price offset | Expected distribution and court confirmation | Separate confirmed input with caps | Article 143 |
How the Article 20 preemptive-purchase procedure affects the model
Under Article 20 of the Special Act, a determined victim may report an intention to purchase the victim home in a court auction by the sale date after providing the security required by Article 113 of the Civil Execution Act.
When there is a highest bidder, the victim purchases at that highest reported price if the court grants permission.
The current 2026 text also addresses a report at the minimum sale price where no highest bidder exists.
The bid deposit is therefore not estimated from a universal percentage in this tool.
Courts specify the amount and method for the particular sale, and the user must enter the amount from that sale notice.
The deposit is part of the purchase price, so it is subtracted once when calculating the later closing balance and included once in upfront cash.
Double-counting it as both an extra cost and an unpaid part of the price would overstate the cash need.
Multiple victims and ownership shares
Article 20 also contains a rule for multiple victims exercising rights in the same property.
If they do not reach another agreement, acquisition shares can be tied to the proportion of recoverable lease deposits.
A single household’s price, offset, financing need, and future sale proceeds may therefore depend on its final share.
This calculator does not assign those shares, and users in a multi-victim case should enter only the amounts attributable to the share confirmed for their analysis.
Article 25 is not modeled as distribution-only
Article 25 allows a victim to request acquisition by a public housing operator, which may exercise the right without the same bond requirement and may provide a public-rental route.
Current provisions also address situations in which both the victim and operator report an intention to purchase.
Public acquisition has its own eligibility, inspection, pricing, and rental conditions, so it is not equivalent to the simple distribution-only path in this tool.
A user considering that option should obtain an operator-specific review and place its confirmed cash flows beside the two results shown here.
Distribution estimate and the Article 143 offset are different
The simplified distribution pool equals the expected auction price minus enforcement and sale costs, confirmed senior claims, and other verified prior or same-rank adjustments.
The estimated tenant distribution is the smaller of that pool and the entered distribution claim.
The unrecovered deposit is the original deposit minus that estimated distribution, with a floor of zero.
Simplified distribution formula
Distributable pool = max of auction price minus enforcement costs minus confirmed senior claims minus confirmed adjustments, or zero.
Estimated distribution = smaller of the distribution claim and distributable pool.
Unrecovered deposit = max of original deposit minus estimated distribution, or zero.
This formula does not rank rights.
It does not determine opposability, a fixed-date priority, a small-tenant priority amount, a tax statutory date, the distribution-demand deadline, pro-rata sharing among equal ranks, or the outcome of an objection.
The entered senior and adjustment totals must come from the sale specification, registry, case record, court inquiry, or professional review.
Why an estimated distribution is not an automatic offset
Article 143 of the Civil Execution Act permits a creditor who is also the purchaser to report the claim and pay the purchase price excluding the amount expected to be distributed.
If an objection is raised against the expected distribution, the corresponding amount may still have to be paid.
The calculator therefore asks for a court-confirmed offset amount instead of assuming that the entire estimated distribution can be used at closing.
The effective offset is capped at the entered offset, estimated distribution, and auction price.
Any estimated distribution left after the effective offset is treated as a separate cash distribution in the purchase path.
The amount used as an offset is not added again as cash, preventing the same claim from being counted twice.
If the entered offset is capped, a warning tells the user to confirm the actual payment mechanics with the enforcement court.
Upfront cash, loan schedule, and liquidity risk
- Subtract the court-notice bid deposit and effective offset from the expected auction price.
- Cap the modeled loan at the amount still due after those two items.
- Treat the remaining balance as additional cash required at closing.
- Add the bid deposit, acquisition tax after relief, registration and legal cost, repairs, and other upfront costs.
- Subtract available cash from that total to identify the liquidity shortfall.
A loan request is not a loan approval.
A lender may change the collateral value, maximum amount, interest rate, term, repayment method, or execution date after underwriting.
The calculation deliberately avoids a fixed policy-loan default because support products and lender practices can change, and individual eligibility cannot be inferred from property values alone.
Use a written lender quote whenever possible and keep a fallback case with a lower loan amount and higher rate.
Level-payment method
For a level-payment loan, the tool uses the standard amortizing-payment formula based on principal, the monthly nominal rate, and the full term.
At a zero rate, principal is divided evenly by the number of months.
Each month’s interest is calculated on the remaining balance, and the rest of the payment reduces principal.
The result displays the first payment, payments made during the analysis horizon, and the remaining balance at the horizon.
Interest-only method
For interest-only financing, monthly payments contain interest until maturity and the full remaining principal is added in the maturity month.
If the analysis horizon ends before maturity, the full principal remains and reduces net sale proceeds.
A low monthly payment can therefore coexist with a large exit liability.
Compare the remaining balance rather than relying on the first-month payment alone.
Closing risk
A lower or delayed loan can leave the buyer unable to pay within the court deadline.
Keep unapproved financing out of the confirmed-cash column.
Repair risk
Vacancy, water damage, heating failures, electrical work, mold, and access disputes can materially raise the acquisition budget.
Assumed-right risk
Rights or unpaid obligations omitted from the input can make the true cost higher than every result shown here.
Acquisition-tax relief through December 31, 2026
Article 36-4 of the Restriction of Special Local Taxation Act provides the current special treatment for a determined jeonse-fraud victim acquiring the victim home by December 31, 2026.
When the calculated acquisition tax is KRW 2 million or less, the relief can eliminate that amount.
When it exceeds KRW 2 million, the current rule deducts KRW 2 million.
The tool applies the deduction only when the user marks formal victim status as determined, chooses to apply the relief, and enters a planned acquisition date no later than the current sunset.
The acquisition-tax input must be the tax before this relief, preferably confirmed with the local government or a qualified tax adviser.
The calculator does not determine the tax base, home-count classification, surcharge, exemption eligibility, filing date, or evidence required by the local government.
Acquisition-tax relief examples under the current rule| Example | Tax before relief | Modeled relief | Tax after relief |
|---|
| Eligible acquisition | KRW 1.5 million | KRW 1.5 million | KRW 0 |
| Eligible acquisition | KRW 3 million | KRW 2 million | KRW 1 million |
| Acquisition after current sunset | KRW 3 million | KRW 0 | KRW 3 million |
Article 36-4 also contains property-tax reductions for a limited period, with a distinction based on floor area.
The monthly holding-cost input should contain the user’s confirmed property-tax burden after any applicable reduction because the calculator does not receive the floor area, assessment, or local bill details needed to calculate it safely.
If the sunset or deduction changes, update the law-date assumption before reusing a saved comparison.
Present-value formulas and what each result means
The model converts the annual discount rate to an effective monthly rate and discounts each month separately.
Purchase outflows include the actual loan payment in each modeled month plus the entered monthly holding cost.
Alternative-housing outflows use the entered monthly housing cost over the same number of months.
The future sale value is reduced by the sale-cost rate and remaining loan balance before discounting.
Cash-flow structure
Net sale proceeds = expected future sale price multiplied by one minus the sale-cost rate, minus the remaining loan balance.
Purchase present value = cash distribution left after offset, minus upfront cash, minus discounted loan and holding outflows, plus discounted net sale proceeds.
Distribution present value = estimated distribution, minus relocation cost, minus discounted alternative-housing outflows.
Purchase advantage = purchase present value minus distribution present value.
Why the original deposit is not added as a purchase asset
The original deposit is a claim used to measure the unrecovered loss and distribution limit.
Adding the full deposit again to the purchase position would treat an already-existing claim as new wealth.
The model instead records the cash distribution not used for offset and the future net value of the acquired property.
Legal treatment of any residual claim against the landlord remains outside the model and requires case-specific advice.
Nominal and present-value views
The detailed results also show nominal positions without discounting.
If nominal and present-value results point in different directions, the decision is sensitive to distant future sale proceeds or long-running housing costs.
Recalculate with a higher discount rate, a longer sale delay, and a lower future sale price rather than selecting the more favorable presentation.
A result is most useful when its direction remains stable across conservative assumptions.
Worked example using the default fictional case
The default values are fictional and do not represent a market quote, court case, or promised loan.
The example begins with a KRW 200 million deposit and distribution claim, a KRW 220 million appraisal, and a KRW 180 million expected auction price.
After KRW 5 million of enforcement costs and KRW 80 million of confirmed senior claims, the simplified distribution pool is KRW 95 million.
The unrecovered part of the original deposit is therefore KRW 105 million.
The example enters a KRW 18 million court-notice bid deposit and a separately confirmed KRW 95 million offset.
That leaves KRW 67 million payable after the deposit and offset.
A KRW 60 million loan leaves KRW 7 million of additional closing cash.
With KRW 1 million of acquisition tax after relief, KRW 2 million of registration and legal cost, KRW 15 million of repairs, and KRW 1 million of other costs, total upfront cash is KRW 44 million.
Default fictional example inputs and outputs| Item | Example amount | How to read it |
|---|
| Estimated distribution | KRW 95 million | Based only on verified aggregate deductions |
| Upfront purchase cash | KRW 44 million | Deposit, closing cash, tax, registration, repair, and other cost |
| First loan payment | About KRW 363,588 | KRW 60 million, 4%, 240-month level payment |
| Loan balance after 60 months | About KRW 49.15 million | Deducted from the future net sale proceeds |
| Future sale assumption | KRW 210 million | Not an appraisal or forecast |
The example also assumes KRW 250,000 in monthly holding cost, KRW 900,000 in alternative monthly housing cost, a 60-month horizon, a 1% sale-cost rate, and a 3% annual discount rate.
Replace every value with documents or conservative estimates from the user’s own case.
The result can change direction when financing, repairs, holding period, or sale value moves even if the auction price stays fixed.
Break-even price, break-even rate, and sensitivity grid
The break-even future sale price is the price at the analysis horizon that makes the two present values equal while all other inputs remain fixed.
If the user’s expected sale price is only slightly above that boundary, the modeled purchase advantage depends heavily on an optimistic exit.
Compare the boundary with recent transactions for genuinely similar size, floor, condition, legal status, and repair quality rather than with the appraisal alone.
The break-even loan rate searches from 0% through 30% for the rate at which the purchase advantage reaches zero.
A message that distribution leads even at 0% means a lower loan rate alone cannot reverse the modeled conclusion.
A message that purchase leads through 30% should prompt a review of whether the future sale value or alternative housing cost is driving an unusually strong result.
It does not imply that a 30% loan is available, lawful, suitable, or affordable.
Reading the nine-cell sensitivity table
- Start with the center cell, which uses the entered future sale price and loan rate.
- Move to the 90% sale-price row to test a weaker exit.
- Move one column right to test a loan rate one percentage point higher.
- If the sign changes across nearby cells, identify the uncertain variable before choosing a path.
The grid tests future sale prices at 90%, 100%, and 110% of the entered estimate and rates one percentage point below, equal to, and one percentage point above the entered loan rate.
It does not include every risk.
Add separate conservative cases for a longer sale delay, additional repairs, unpaid management charges, possession litigation, tax changes, a lower approved loan, or a higher discount rate.
Step-by-step document workflow before a decision
- Match the formal victim-determination document to the tenant, lease, property, and court case.
- Record the case number, sale date, minimum sale price, court-notice bid deposit, distribution-demand deadline, and filing status.
- Review the sale specification, real-estate registry, property-status report, appraisal, and relevant case records.
- Separate the estimated distribution from the amount actually eligible for an Article 143 offset and confirm both with the court or representative.
- Obtain a lender quote showing the approved amount, rate, repayment method, maturity, collateral conditions, and execution timing.
- Confirm acquisition tax before and after relief with the local government, then obtain registration, legal, repair, and moving estimates.
- Save conservative, base, and optimistic calculator cases for meetings with the court, legal-aid provider, housing-support organization, lender, and tax office.
Court and title records
- Sale-date notice and sale specification
- Real-estate registry and status report
- Appraisal and distribution-demand receipt
- Written notes on distribution and offset treatment
Funding and property records
- Lender pre-review and repayment schedule
- Local-tax and registration-cost confirmation
- Inspection and repair estimates
- Comparable transactions and alternative-housing quotes
Keep the source and date beside every input.
A number copied from an old appraisal, a verbal lender estimate, or another victim’s case may not apply to the current sale.
When a value is uncertain, use a range rather than hiding the uncertainty inside a single favorable estimate.
The warnings in the calculator are a checklist for missing confirmations, not proof that all unlisted issues are resolved.
Common interpretation mistakes
Treating appraisal value as cash
An appraisal is not a guaranteed future sale price.
Sale timing, defects, market liquidity, occupancy, and legal issues can create a large gap between appraisal and net proceeds.
Counting the same distribution twice
An amount used to offset the purchase price is not also cash received.
Only the estimated distribution left after the modeled offset enters the purchase path as cash.
Using an advertised loan maximum
Product-level maximums do not establish an individual approval.
Collateral review, income, existing debt, guarantee conditions, and timing can reduce the executable amount.
Ignoring the cost of the alternative
Distribution-only is not cost-free if the tenant must pay rent, interest, moving costs, or a new deposit-financing cost elsewhere.
Use the same horizon for both paths.
Frequently asked questions
Does formal victim status guarantee that I can complete the purchase?
No.
Victim status is an essential legal premise, but the court procedure, filing deadline, required security, purchase permission, available financing, and payment deadline must still be satisfied.
Can I automatically offset the whole estimated distribution?
No.
Article 143 has procedural conditions, and an objection to the expected distribution can change the amount that must be paid.
Enter only an amount confirmed for the case.
Does purchasing erase the unrecovered deposit claim?
The economic value of acquiring the home and the legal treatment of the lease-deposit claim are different questions.
Distribution, offset, remaining claims, and collection against the landlord require case-specific legal advice.
The calculator does not assign a future recovery value to that residual claim.
Is the KRW 2 million acquisition-tax reduction automatic?
No.
The statutory conditions, victim-home relationship, current acquisition deadline, filing, and evidence requirements must be met.
Confirm the actual tax with the competent local government.
Does a sale estimate above break-even mean I should purchase?
No.
Break-even is a mathematical boundary under every entered assumption.
Title risk, repair overruns, possession disputes, tax, financing failure, and a delayed sale can reverse the conclusion.
Does the distribution-only result include public-housing acquisition?
No.
Public-housing acquisition under Article 25 has separate operator review, pricing, and rental conditions.
Obtain those confirmed terms and compare them as a third path.
Official sources and final verification
The direct-purchase explanation is based on Articles 20 and 25 of the Special Act on Support for Jeonse Fraud Victims and Housing Stability.
The security and purchase-price offset explanations use Articles 113 and 143 of the Civil Execution Act.
The acquisition-tax rule uses Article 36-4 of the Restriction of Special Local Taxation Act.
These links point to official Korean legal sources and should be rechecked against the effective date for the user’s action.
Use the result as a question list, not a verdict
This calculator is not legal, tax, valuation, lending, or investment advice.
It does not establish court permission, a distribution table, legal priority, an offset, a loan approval, a tax assessment, or a future sale price.
Save the inputs with their source documents and verify them with the enforcement court, a legal-aid or qualified legal professional, the housing-support organization, the local government, and the lender before acting.