Reconstruction Burden Fees Reduced for Commercial Association Members

From the 8th of next month, the reconstruction burden fees for commercial association members will be reduced. It is expected that the issues causing delays in the project due to opposition from commercial association members will be somewhat resolved. Additionally, if the ownership and actual residence requirements of 5 years and 3 years respectively are met, the status of a small-scale housing maintenance project association member can be transferred.

The Ministry of Land, Infrastructure and Transport announced that the amendments to the Enforcement Decree of the Act on the Recovery of Excessive Reconstruction Profits, the Enforcement Decree of the Small-scale Housing Maintenance Act, and the Enforcement Decree of the Framework Act on National Land, containing these details, were approved at the Cabinet meeting on the 26th.

The Reconstruction Excess Profit Recovery System (재초환) is a system where the public recovers the excess profits generated from reconstruction projects. If an association gains profits exceeding 30 million KRW from the project, 10 to 50% of the profits are recovered as reconstruction burden fees. The reconstruction burden fee is determined by subtracting the housing price at the start of the project and development costs from the housing price at the end of the project.

The main point of this amendment is to reflect the value of auxiliary and welfare facilities previously owned by commercial association members when calculating the reconstruction burden fees. Until now, the value of auxiliary and welfare facilities was not recognized in the burden fee calculation. As a result, the burden on commercial association members was significant, and conflicts between residential and commercial association members often caused delays in the project itself. A Ministry of Land official stated, "With this amendment, disputes among association members due to reconstruction burden fees are expected to decrease, and the speed of reconstruction project promotion is likely to increase, which may also have a supply stimulation effect."

Furthermore, the amendment to the Enforcement Decree of the Small-scale Housing Maintenance Act, passed on the same day, established ownership and residence requirements (5 years ownership and 3 years residence) as criteria for allowing the transfer of association member status for single-household homeowners. The floor restriction regulations for street housing maintenance projects have been relaxed, and the procedures for the inaugural general meeting to establish an association have been further specified. Through the Enforcement Decree of the Framework Act on National Land, standards and procedures for establishing super metropolitan area plans have been prepared. The amended enforcement decrees are scheduled to take effect from August 4th after presidential approval.

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