Real Estate Trust Cost & Tax (Security, Management, Disposal)

Korea Real Estate Trust Cost & Tax Calculator

This calculator estimates the trust fee, value-added tax (VAT), and trust-registration cost that arise when a Korean property owner (the truster) transfers real estate to a trust company (the trustee).
For a security trust it also compares the registration tax against a traditional mortgage (geunjeodang) lien, and it clarifies how acquisition tax, property tax, and the comprehensive real estate tax apply while the property is held in trust — all based on Korea’s 2026 tax rules.

Korea-based estimate. This English page follows Korean law as of 2026 (Local Tax Act, Comprehensive Real Estate Tax Act, VAT Act) and market-typical fee ranges. Trust fees are not statutory — they are set by each trust company’s schedule. This tool does not replace an official quote, tax notice, or legal advice.

Under the Korean Trust Act (Article 2), a trust is a legal relationship in which the truster transfers property to the trustee, who manages or disposes of it for the trust purpose.
Trust property is legally separated from the personal assets of both the truster and the trustee, so ordinary creditors of the truster generally cannot enforce against it.
This “bankruptcy remoteness” is the core value of a real estate trust.

Types of real estate trust

1. Security trust (담보신탁)

Instead of registering a mortgage lien, the owner transfers the property to a trust company and names the lending bank as the priority beneficiary.
The bank secures its loan with a priority beneficiary certificate, and on default the trustee disposes of the property and distributes proceeds.
Unlike a mortgage, a security trust blocks junior claims (provisional attachments, injunctions) registered after the trust, improving collateral stability.

2. Management trust — active (갑종) & passive (을종)

An active management trust has the trust company actively manage the property: leasing, maintenance, and tax payments.
A passive management trust only transfers title for safekeeping, so its fee is lower than the active type.
It is used by overseas residents, elderly owners, and co-owners who want to prevent disputes.

3. Disposal trust (처분신탁)

The owner entrusts the sale of hard-to-sell assets (large commercial buildings, special properties, co-ownership shares) to the trust company.
The fee is often based on the disposal price.
Sale-management and land (development) trusts are business products for building pre-sales or development; this calculator focuses on the owner-side security, management, and disposal trusts.

Trust fee and VAT

The trust fee is the trustee’s compensation.
It is not a statutory rate; each trust company sets it by schedule and contract.
The calculator provides market-typical defaults that you can adjust to a real quote.

• Security trust: based on the secured claim (priority beneficiary), typically a one-time fee (example default 0.2%).
• Active management trust: about 0.5% per year on appraised value.
• Passive management trust: about 0.2% per year, or a flat fee.
• Disposal trust: about 0.8% one-time on the disposal (appraised) price.
• VAT: the trust fee is a supply of services, so 10% VAT is added (VAT Act Article 30).

Annual fees accumulate with the trust term.
For example, a 1 billion KRW active management trust at 0.5% per year for five years is a 25 million KRW fee plus 2.5 million KRW VAT, totaling 27.5 million KRW.
A 300 million KRW security trust at a one-time 0.2% is 600,000 KRW plus 60,000 KRW VAT, totaling 660,000 KRW.

Security trust vs. mortgage lien — registration cost

The biggest cost advantage of a security trust is registration tax.
A mortgage lien is taxed on the maximum secured amount (usually 120% of the loan), while a security-trust registration is a small flat amount per property.

Mortgage lien registration

• Registration license tax = maximum secured amount × 0.2% (Local Tax Act Art. 28(1)1(c)2)
• Local education tax = registration tax × 20% (Local Tax Act Art. 151) → 0.04% of the secured amount
• Total tax = maximum secured amount × 0.24%

Security-trust registration

• Truster→trustee transfer is exempt from acquisition tax (Local Tax Act Art. 9(3))
• Registration license tax = “other registration,” 6,000 KRW per property (Local Tax Act Art. 28(1)1(e))
• Local education tax = registration tax × 20% → 1,200 KRW per property

For a 300 million KRW loan, the maximum secured amount is 360 million KRW and the mortgage registration tax is about 864,000 KRW.
The equivalent security-trust registration tax is only 7,200 KRW per property, saving about 857,000 KRW in registration tax.
Because the security trust adds a trust fee, judge the final choice on “registration tax saved minus trust fee (with VAT).”
When you select a security trust, the calculator shows the total cost of the mortgage route and the trust route side by side.

Does a trust remove taxes? Taxation while in trust

A common misconception is that a trust avoids property tax and the comprehensive real estate tax.
It does not.
Although title moves to the trustee, the party liable for holding taxes remains the truster.

Acquisition tax (exempt): transfers truster→trustee, the return on termination, and transfers to a new trustee are all exempt (Local Tax Act Art. 9(3), with trust registration; housing associations excluded).
Property tax (truster pays): even under the trustee’s name, the truster is the taxpayer (Local Tax Act Art. 107(2)5). A 2021 amendment moved liability from trustee back to truster.
Comprehensive real estate tax (aggregated to truster): trust property is aggregated as the truster’s, and if the truster defaults, the trustee bears a secondary liability limited to the trust property (Comprehensive Real Estate Tax Act Art. 7-2 & 12-2).

So even after transferring title through a security or management trust, the truster keeps paying property tax and the comprehensive real estate tax.
The real benefit of a trust is collateral stability, asset protection, management delegation, and blocking junior claims — not tax avoidance.

How to use the calculator

Step 1: Choose the trust type

Pick security, active/passive management, or disposal.
Changing the type auto-fills a market-typical default fee rate and billing mode.

Step 2: Enter property and loan data

Enter the appraised value and number of properties.
For a security trust, add the secured claim and the maximum-secured ratio (default 120%).

Step 3: Adjust the fee terms

Set the trust fee rate and billing mode (one-time or annual) to match a real quote.
For annual fees, enter the trust term in years and any judicial scrivener fee.

Step 4: Read the results

See the total cost, fee breakdown, mortgage comparison, registration cost, and taxation.
For a security trust, compare the trust-route and mortgage-route totals directly.

Frequently asked questions

Q. Is acquisition tax due on a security trust?

A. No. Transfers truster→trustee, the return on termination, and transfers to a new trustee are exempt (Local Tax Act Art. 9(3)), provided trust registration is done and housing-association cases are excluded.

Q. Can a trust skip property and comprehensive tax?

A. No. The truster remains the property-tax taxpayer (Art. 107(2)5), and the comprehensive real estate tax is aggregated to the truster. Holding taxes do not disappear.

Q. How is the trust fee rate set?

A. It is not statutory; each trust company sets it by schedule and contract. Use the default, then enter your real quote for accuracy.

Q. Which is cheaper, mortgage or security trust?

A. On registration tax the trust is far cheaper, but it adds a trust fee. The result depends on loan size, fee rate, billing mode, and term — use the total-cost comparison.

Estimate your real estate trust cost now

Enter the trust type and amounts to see the fee, VAT, registration cost, mortgage comparison, and taxation at a glance.

Calculated under Korea’s 2026 rules (Local Tax Act, Comprehensive Real Estate Tax Act, VAT Act).

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