[Asia Economy Reporter Baek Kyunghwan] The court has ruled that the development charges imposed on the innovation city development corporations are justified.
On the 8th, the Supreme Court announced that it dismissed the appeal in the lawsuit filed by the three innovation city developers?Korea Land and Housing Corporation (LH), Jeonnam Development Corporation, and Gwangju Urban Corporation?against Naju City seeking the cancellation of the 'development charge imposition' and upheld the lower court's ruling.
In this ruling, the Supreme Court stated, "The innovation city development projects carried out based on the former Innovation City Act are subject to development charges."
Development charges are a system where the state or local governments recover a certain percentage of the development gains generated from development projects involving land reshaping or land use changes from the developers. It is one of the three land public concept laws introduced by the government in the late 1980s to proactively address land issues such as land price increases, rampant land speculation, and privatization of development gains.
Earlier, Naju City expressed the position that the three development corporations, which generated enormous development gains from the innovation city development work that began in May 2007 and was finally completed in December 2015, must pay development charges according to the land public concept, and in 2016, imposed and collected development charges amounting to 73.2 billion KRW from the three developers.
However, the three developers claimed there was no legal basis and filed an administrative appeal with the Central Land Expropriation Committee in October 2016. The Central Land Expropriation Committee ruled that Naju City's imposition of development charges was lawful and ordered the return of only 3.1 billion KRW imposed on rental apartments and relocation sites, which are exempt projects.
Subsequently, in October 2017, the three developers filed a lawsuit at the Gwangju District Court seeking the cancellation of the 'development charge imposition.'
Meanwhile, Naju City became the first local government to establish a final precedent for victory in lawsuits related to innovation city development charges in 10 locations nationwide.
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