"'Donjanchi' Daejangdong, Special Case Applying 50% Reduction on Development Charges"

Special Tax Reduction on Development Gains Totaling 958.4 Billion KRW (20%→10%)
Estimated Development Charges Reduction of About 100 Billion KRW

View of Daejang-dong.

The Daejang-dong development project in Seongnam-si, Gyeonggi Province, has been identified as a 'special case application' project eligible for a 50% reduction in development charges.

Jin Seong-jun, a member of the Democratic Party of Korea, announced on the 4th that he received a written response from the Ministry of Land, Infrastructure and Transport confirming that the Daejang-dong development project is subject to the 'special case application' allowing for a reduction in development charges.

According to Representative Jin, the Daejang-dong urban development project received approval for its implementation plan in 2016 and qualifies for a 50% reduction in development charges.

At that time, the burden rate stipulated by the Development Gains Recovery Act was 20%, but due to a four-year temporary 'reduction special case' system introduced by the Park Geun-hye administration in 2014, the payable charges were reduced by 50%, resulting in a burden rate of 10%, Representative Jin explained.

Representative Jin emphasized that this special reduction in development charges was introduced by the Park Geun-hye administration to revitalize the real estate market and restore economic vitality by easing real estate regulations and promoting private investment and development.

Initially, the special case provided a 50% reduction for the metropolitan area for one year and a 100% exemption for other regions, but as the special case period approached in 2015, Lee Jang-woo of the Saenuri Party proposed a bill to extend the application period by three years, which was passed, maintaining the special case until June 2018, Representative Jin explained.

Additionally, Representative Jin stated that Seongnamui Tteul, the developer of the Daejang-dong urban development project, is estimated to receive approximately 100 billion KRW in development charge reductions due to this extension of the special case.

He further explained that the development gains revealed so far amount to a total of 958.4 billion KRW, including 590.3 billion KRW in shareholder dividends and 368.1 billion KRW in donations and contributions, so applying the special case burden rate of 10% would result in development charges of at least 95.8 billion KRW.

Representative Jin stated, “The development charges have been repeatedly reduced or exempted as a means of regulating the real estate market, turning the law into a patchwork.” He emphasized, “In public-private joint (SPC) development projects, private developers benefit from public permits and land expropriation rights, so public obligations such as constructing rental apartments should be strengthened, and excessive profits beyond reasonable returns should be recovered to ensure that development gains are enjoyed by the public.”

This content was produced with the assistance of AI translation services.