Detailed Plan for Reconstruction Excess Profit Reduction Confirmed... Payment Deferral for Charges for Those Aged 60 and Over

If a Household Has Direct Relatives Aged 60 or Older on Resident Registration, It Is Recognized as One Household
Development Costs Calculated Using Appraised Value Instead of Official Land Price

Regarding the decision to provide a reduction benefit to long-term single-household single-homeowners when collecting excess profits from reconstruction, the Ministry of Land, Infrastructure and Transport has defined the single-household standard as 'the union member and spouse, and direct ascendants and descendants registered on the resident registration.' For the single-home standard, houses acquired through inheritance or marriage will be excluded from the housing count.

On the 1st, the Ministry announced the draft enforcement decree and enforcement rules of the "Act on the Recovery of Excess Profits from Reconstruction" containing these details for public comment. This matter will be applied starting March 27.

Single Household, Single Home Standard

Regarding the single-household standard, the government decided to consider it as one household if there is at least one direct ascendant aged 60 or older registered on the resident registration, taking cohabitation and support into account. For example, even if a union member lives with parents who own a house in another region, if the parents are 60 or older, they will be recognized as one household. Direct descendants under 19 years old will also be considered household members.

The amendment to be implemented from March includes a provision to reduce reconstruction charges by up to 70% depending on the holding period for long-term single-household single-homeowners. Those holding for '6 to less than 10 years' receive a 10?40% reduction, '10 to less than 15 years' receive 50%, '15 to less than 20 years' receive 60%, and '20 years or more' receive 70%. Accordingly, the Ministry established the application criteria for single-household single-homeowners.

For the single-home standard, houses acquired through inheritance or marriage (hereinafter referred to as inheritance/marriage houses), houses for residence during reconstruction projects (hereinafter substitute houses), and low-priced houses will be excluded from the housing count.

Inheritance/marriage houses refer to houses held for less than five years due to inheritance or marriage. Substitute houses are those acquired after the public announcement date of the project implementation plan approval. If the owner has resided for more than one year before the end of the imposition period, up to one house will be recognized. Union members who received a reduction in reconstruction charges must dispose of inheritance/marriage houses within five years from acquisition and substitute houses within three years from the end of the imposition period.

Low-priced houses are those with a publicly announced price of 300 million KRW or less at acquisition (excluding houses located in areas designated as speculative overheating zones), and only one such house will be recognized.

Payment Deferral Application Available for Those Aged 60 and Over

Seoul City approved the architectural plan for the reconstruction project of Sanggye Jugong Complex 5 at the 15th Architecture Committee meeting. The photo shows Sanggye Jugong Complex 5 in Nowon-gu, Seoul, on the 31st. Photo by Jin-Hyung Kang aymsdream@

Union members who are single-household single-homeowners aged 60 or older may apply for deferral of reconstruction charge payments until the disposal of the house if they provide collateral. If the union member who meets the application requirements submits an application form and a payment collateral provision document to the local government head at least one month before the payment deadline, the local government head will notify the union member in writing of the approval decision by the payment deadline.

If a union member who has received payment deferral approval 'transfers or inherits all or part of the relevant house,' 'fails to meet the single-household single-homeowner requirements,' or 'cannot collect the full reconstruction charge,' the approval will be canceled. Interest will be added to the deferred charges.

Cost Calculated Based on Appraised Value

Going forward, when public rental housing land is contributed as a public contribution during reconstruction projects, the amount corresponding to the appraised value, rather than the publicly announced land price, will be recognized as a cost. This is a measure to realistically recognize the scope of development costs affecting the calculation of reconstruction charges.

Currently, public rental housing is constructed during reconstruction projects, and the associated land is contributed to local governments as a public contribution. The amount corresponding to the publicly announced land price of the contributed land is recognized as a cost when calculating charges, but this standard will be changed to the appraised value.

The government has also allowed public sale housing to recognize costs for public contribution land based on the appraised value.

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