Buying Korean state-owned land before ending a lease
A household that owns a home or warehouse on national land, or directly cultivates leased national farmland, may want to compare annual rent with a purchase.
Long occupation alone does not create an automatic right to buy.
The managing authority must first review continued state use, disposal restrictions and the legally available sale method.
This calculator organizes the application grounds and funding questions before that conversation, using Korean 2026 rules.
This tool concerns ordinary national land sold under the National Property Act.
Local-government property, administrative property, roads, rivers and buildings themselves may require different rules.
Verify ownership, the managing authority and ordinary-property status, then compare exactly the same land area.
A preliminary application review is not a sale approval or a promise of ownership.
The next practical step
Prepare the building register, ownership and historical occupation evidence, or lawful lease and continuous cultivation records.
Save the review sheet and ask KAMCO or the actual managing authority about the sale area, negotiated-sale basis and installment conditions.
Confirm affordability before requesting an appraisal, because withdrawal after appraisal can create costs.
Private-building and farmland grounds differ
Private-building owner
Enforcement Decree Article 40(3)(14) covers land with no utility for the state, occupied or used by a privately owned building, sold to that building’s owner.
Subparagraph (a) concerns private-building occupation on or before 2012-12-31.
Subparagraph (b) concerns land formerly owned by the building owner that transferred to the state by judgment or similar grounds.
The sale area is limited to twice the building footprint.
Direct farmland cultivator
Article 40(3)(18)(h) concerns farmland under the Farmland Act lawfully leased or used with permission and directly cultivated continuously for at least 5 years.
Five years of unauthorized occupation or cultivation delegated to someone else is not equivalent.
Verify the start date, contracts, renewals and continuous direct cultivation together.
A 50 m² footprint on 150 m² of occupied land gives an indicative cap of 100 m² under this building ground.
The calculator withholds the budget if the requested area exceeds that cap; it does not silently shrink the request.
If occupation covers only 80 m², the indicative cap is 80 m² even though twice the footprint is 100 m².
Parcel division and the actual sale boundary still require authority review.
Competing applications or actual or anticipated legal disputes may require competitive disposal under Article 40(2) or 40(6).
A result saying that the selected grounds are unmet does not rule out every other statutory ground; ask the authority about facts outside this limited review.
Ledger value is different from appraisal and purchase price
The KRW 30 million appraisal-count boundary
For an ordinary private-buyer sale, Article 42(1) requires the arithmetic mean of two appraisal totals when ledger value is at least KRW 30,000,000, or one appraisal below that threshold.
Ledger value selects the appraisal count; it does not automatically become the sale price.
Two target-area appraisals of KRW 28,000,000 and 32,000,000 give a mean of KRW 30,000,000.
Rounding that mean to whole won is this tool’s budgeting convention.
Article 42(2) prevents use of an appraisal after more than 1 year from its evaluation date.
Enter each date; future dates and expired evaluations withhold the appraisal-based price.
When two appraisals are required, both must be available and valid.
Before appraisal, use an explicitly assumed target-area purchase total and replace it when the authority determines the reserve price.
The official unit land price used for rent is not automatically the sale price or a verified market valuation.
Under Article 42(11), withdrawal after appraisal without just cause may make the applicant responsible for appraisal and surveying costs.
The calculator shows the sum of the entered potential charges separately; it is not an actual bill and is not automatically added to purchase costs.
If a charge also belongs in acquisition extras, check its scope and include it only once.
The 3, 5, 10 and 20-year installment grounds
Main 2026 Article 55 installment grounds, maximum review terms and notice-rate ratios| Legal ground | Maximum years | Base COFIX ratio |
|---|
| General price above KRW 5 million and up to KRW 30 million: Article 55(1) | 3 | 100% |
| General price above KRW 30 million: Article 55(2)(1) | 5 | 100% |
| Pre-2013 private-building occupation and other specified cases: Article 55(2)(3) | 5 | 100% |
| Farmland sold to actual cultivator: Article 55(3)(1) | 10 | 80% |
| Qualifying redevelopment occupant at implementation approval: Article 55(4)(1) | 20 | 50% |
| Qualifying redevelopment successor: Article 55(2)(4) | 5 | 100% |
Under the general price ground, exactly KRW 5,000,000 is not above the lower threshold; KRW 5,000,001 enters the 3-year review band.
Exactly KRW 30,000,000 remains in that band, while KRW 30,000,001 enters the general 5-year band.
A special ground can have its own term even for a smaller purchase.
For old buildings, negotiated sale and installment eligibility have separate statutory wording; verify each applicable condition with the authority.
Terms are approval ceilings, not automatic entitlements.
Rate reductions depend on the legal basis
Ministry of Economy and Finance Notice No. 2026-35, Article 1, uses the last new-funds COFIX published during the preceding quarter, changing quarterly.
Article 55(3) grounds use 80% of that rate and Article 55(4) grounds use 50%, rounded at the third percentage decimal.
A fictional base COFIX of 3.257% gives 2.61% for qualifying farmland grounds and 1.63% for qualifying original redevelopment-occupant grounds.
A shorter payment plan under an eligible farmland ground does not automatically change the legal basis; simply selecting ten years does not establish that ground.
Keep confirmed, assumed and unknown inputs separate
Taxes and advance principal
An advance credited against the purchase price must not be added to principal again.
Enter a verified total for acquisition and related taxes; this tool does not infer a universal tax rate.
Enter registration, survey and other extras separately, along with annual property tax and holding costs after purchase.
Unknown cost is different from confirmed zero, so leave an unknown amount blank.
Same-area annual lease cost
Use a verified annual amount or estimate it as year-specific official KRW/m² price × comparison area × verified annual rate / 100.
The general 5%, residential 2% and qualifying direct-cultivation 1% figures are conditional minimum references.
Check benefit-recipient housing rules, the crop-income cap, bid conditions, temporary notices, relief and annual adjustments against the actual worksheet.
When 300 m² is leased but only 100 m² is being purchased, neither whole-parcel rent nor an automatic one-third allocation necessarily gives a valid comparison.
Ask the authority for the corresponding 100 m² rent and clarify the remaining land’s use.
Each evidence group needs a status and reference; confirmed evidence also needs a valid basis date on or before the review date.
Assumptions need an explanation and remain labeled in the result.
These labels record the user’s evidence status; they do not authenticate documents.
Formulas and payment timing
Annual purchase and lease cash flow
- With price P, advance A and N years, financed principal is P − A.
The regular annual principal payment is floor((P − A) / N), and the final year clears the remaining principal.
- Annual interest = opening unpaid principal × applicable annual percentage / 100, rounded to whole KRW.
Principal and interest are assumed payable once at each year end.
- Annual lease = first-year amount × (1 + rent growth)^(year − 1).
Rent is prepaid at the beginning of each year, while repayments and annual holding costs occur at year end.
- Monthly reserve = ceil((first annual repayment + annual holding cost) / 12).
This is a funding target, not approved monthly installment billing.
For discount rate d expressed as a decimal, year-y lease PV is annual rent / (1+d)^(y−1); purchase end-year outflow PV is outflow / (1+d)^y.
Taxes and acquisition extras are conservatively placed at the initial acquisition date.
Annual holding cost is fixed, and the entered COFIX is assumed unchanged.
Actual contract dates, quarterly interest changes, daily calculations, rounding and overdue charges must follow the authority’s documents.
The model assumes immediate delivery and lease termination at acquisition; add separately any rent incurred during the actual transition.
Step-by-step use
- Verify the property and area. Confirm ordinary-property status, occupation type, footprint or lawful farming start, and a common purchase/lease comparison area.
- Prepare the price and costs. Enter ledger value, an assumed purchase total or valid appraisal totals, advance principal, taxes and extras.
Keep pre-appraisal prices explicitly assumed.
- Verify rent and installment grounds. Use same-area annual rent, identify the legal basis, then enter planning COFIX, growth assumptions, discount rate and horizon.
- Read cash needs before terminal assets. Check initial cash, first annual payment, total interest and remaining principal, then inspect economic cost under the terminal-recovery assumption.
- Use the report for questions. TXT export retains full inputs, evidence status, references, assumptions and annual schedules.
Complete the document checklist, save or print, and follow the authority’s actual application process.
Worked fictional example: KRW 30 million over five years
Assume a 100 m² comparison area, 50 m² building footprint and occupation from 2012-12-31.
Purchase total is KRW 30,000,000, advance 3,000,000, acquisition and related taxes 1,200,000, extras 300,000 and annual holding cost 200,000.
Assume the old-building 5-year basis, base COFIX 3.25%, zero discount/rent growth/land-value change, and 100% net terminal recovery.
These amounts are not market quotes, a verified interest rate or a tax-rate estimate.
Fictional KRW 27 million balance repaid over five years at 3.25%| Elapsed year | Principal (KRW) | Interest (KRW) | Ending balance (KRW) |
|---|
| 1 | 5,400,000 | 877,500 | 21,600,000 |
| 2 | 5,400,000 | 702,000 | 16,200,000 |
| 3 | 5,400,000 | 526,500 | 10,800,000 |
| 4 | 5,400,000 | 351,000 | 5,400,000 |
| 5 | 5,400,000 | 175,500 | 0 |
Results from the same inputs
Initial cash is KRW 4,500,000 and total installment interest is 2,632,500.
Full purchase payments excluding annual holding costs total 34,132,500; five-year cash outflow including holding costs is 35,132,500.
First end-year principal plus interest is 6,277,500, giving a monthly reserve including holding costs of 539,792.
Annual lease of 1,500,000 totals 7,500,000 over five years.
Assuming net recovery of 30,000,000 at year five, purchase economic net cost is 5,132,500 and lease-minus-purchase difference is 2,367,500.
Extending the horizon to 30 years with the same assumptions gives a cash-outflow cross in year 27.
Cash totals and economic net cost have different meanings because purchase retains a land asset.
Lower terminal recovery or higher holding and disposal costs can change the comparison materially.
When the installment term exceeds the horizon
Cash-outflow cross
The tool reports the first fully-paid year when cumulative rent equals or exceeds cumulative purchase outflow.
It does not label a mostly unpaid 20-year purchase favorable simply because initial installments are small.
No cross within the horizon does not itself mean an economic loss or ineligibility to buy.
Economic cost including the terminal asset
Terminal net equity = P × (1 + land growth)^horizon × net recovery ratio − unpaid principal.
Economic cost PV = horizon outflow PV − terminal net equity PV.
Include disposal taxes and expenses in the recovery ratio; unpaid principal is already subtracted separately.
National Property Act Article 51 normally requires full payment before title transfer, subject to statutory exceptions.
Do not assume unrestricted resale before receiving title.
Economic net cost remains pending unless the user verifies or explicitly assumes title, balance settlement and terminal recoverability.
It is a planning comparison, not an actual sale-proceeds or statutory settlement calculation.
A retired household with limited liquidity should inspect initial cash, annual repayments and remaining principal before relying on terminal asset value.
A farmer should first verify lease renewal and purchase grounds; a redevelopment occupant should prepare evidence distinguishing occupation at implementation approval from later succession.
Tips and limits: contracts and notices control
- The ordinary payment deadline is set by the authority within 60 days of the contract.
This tool does not generate the actual due date or apply for installments.
- Review dates are supported from 2026-08-20 through 2026-12-31.
Later projected years assume the 2026 rules continue; verify future law and actual quarterly rates separately.
- Rent growth is a user assumption, not a statutory prediction of official land prices.
Check relief, annual adjustment, crop-income caps, taxes and actual lease renewal when revising rent.
- Existing unauthorized-use compensation, arrears and pre-delivery rent do not automatically disappear when a purchase is planned.
Reconcile the existing ledger separately and confirm delivery and lease termination in writing.
- Supported amounts and calculated totals are capped at KRW 1 trillion, area at 1 million m² and the horizon at 1–50 years.
Excess values, invalid dates and missing inputs withhold results; whole-won displays remain budgeting estimates.
Frequently asked questions
Does long occupation automatically allow purchase?
No.
Verify ordinary-property status, disposal restrictions, state utility and the applicable building-owner or lawful continuous-cultivation grounds.
An application-review result is not an approval.
Do five unauthorized farming years qualify?
Article 40(3)(18)(h) concerns at least five continuous years of direct cultivation under lawful lease or use permission.
Unauthorized occupation is not automatically combined with that lawful period.
Is twice the footprint twice the total floor area?
No.
This ground uses the building footprint.
Occupied area and the requested purchase area also matter; division and actual sale boundaries require authority review.
Are two appraisals required at exactly KRW 30 million?
For the ordinary private-buyer case, ledger value of at least KRW 30 million requires two.
The general 3/5-year installment boundary instead asks whether the sale price exceeds KRW 30 million.
These are different tests.
Does a five-year farmland plan still use the 80% ratio?
The notice ratio follows the eligible Article 55(3) legal ground, not the selected length alone.
Verify the qualifying ground and actual approved terms; choosing a shorter plan does not itself change the basis.
Should advance principal be added to the purchase price again?
No.
An advance credited to the purchase price is not an extra cost.
Check the contract if a separate fee or deposit has a different legal and accounting character.
Does no cash cross mean leasing is better?
That result alone is insufficient.
Purchase retains a land asset while lease pays for use.
Read economic cost with terminal recovery and unpaid principal together with actual liquidity needs.
Must every post-appraisal withdrawal pay the appraisal cost?
Article 42(11) permits charging costs for withdrawal without just cause.
The authority determines the actual circumstances, liability and amount; the displayed exposure is not an automatic bill.
Official sources and the next action
Rule year: Korea 2026; official verification date: 2026-10-21.
The current statutes and notice were checked directly through the National Law Information OPEN API.
National Property Act ID001598 / MST283349 was promulgated 2026-02-19; Decree ID002907 / MST288713 was promulgated 2026-08-18; both current texts are effective 2026-08-20.
Interest notice administrative-rule ID2040544 / serial2100000272980, Notice No. 2026-35, is effective 2026-01-02.
- National Property Act Articles 48, 50 and 51: restrictions, installments and title transfer
- Enforcement Decree Articles 29, 40, 42, 51, 54 and 55: rent, negotiated sale, appraisal and payments
- Notice on interest for installment payment of national property charges, Article 1: quarterly COFIX and 80% / 50% grounds
- KAMCO state-property sale guidance: actual property management, applications and consultation