[8.16 Supply Measures] Reconstruction Regulation Easing Postponed to Next Month... Association Looks to District Office for "Internal Review"

Disappointment in Complexes Expecting Eased Jechowan
Banpo Hyundai and Others Decide to Wait and See

[Asia Economy Reporter Noh Kyung-jo] The revision of the Reconstruction Excess Profit Recovery System (재초환) has been postponed until next month. The complexes subject to 재초환, which had hoped that the first housing supply plan of the Yoon Suk-yeol administration would include easing of reconstruction regulations, are trying to hide their disappointment. In particular, for complexes that have already passed the burden charge imposition deadline, the decisions made by the local district offices have become crucial.

According to the maintenance industry on the 16th, the estimated reconstruction burden charge per member of the Banpo Hyundai Apartment (Banpo Centreville Asterium, photo) in Seocho-gu, Seoul, is 340 million KRW. This amount is about 150% higher than the previously notified amount (135.69 million KRW) by the Seocho District Office in 2018.

재초환 is a system that recovers up to 50% tax if the profit per member from the reconstruction project is expected to exceed 30 million KRW. It was introduced in 2006 during the Roh Moo-hyun administration, suspended due to the real estate market downturn, and revived in 2018 under the Moon Jae-in administration.

The burden charge is calculated based on the official price at the time of completion. Recently, with the surge in housing prices, the amount has naturally increased. This is also why calls for easing 재초환 regulations have grown louder.

The industry expected that the 기준금액 (standard amount) of 30 million KRW for 재초환 would be raised to around 100 million KRW in the upcoming policy announcement. However, the government postponed the related announcement citing "careful review." Minister of Land, Infrastructure and Transport Won Hee-ryong said, "Presenting a conclusion on 재초환 could cause confusion during the National Assembly's deliberation process," adding, "We will propose measures when submitting the legislative bill."

The Banpo Hyundai union and others have no choice but to wait and see. A union official said, "The complex is small with 108 households, and a lot of money has already been invested in project costs, so a tax burden of 200 to 300 million KRW seems excessive," adding, "We will wait for the district office's policy."

Earlier, Seocho-gu accepted the Banpo Hyundai reconstruction union's request in April to postpone the burden charge imposition schedule, stating in an official letter that "the imposition procedure will be temporarily postponed (suspended) until the government's policy direction is decided."

Since the burden charge standard easing is being considered as part of President Yoon Suk-yeol's campaign promises, and given that the impact of changes in the burden charge amount could be significant once legislative procedures proceed, this decision was made. Similarly, Eunpyeong-gu also decided to temporarily postpone the burden charge imposition procedure for Yeonhui Villa while monitoring policy changes related to 재초환.

However, the suspension period was set until the end of July, which has already passed by about half a month. A Seocho District Office official said, "At the time of sending the official letter, the exact timing of the government's policy announcement was unknown, so the postponement deadline was arbitrarily set," adding, "We will internally review whether to continue the burden charge imposition procedure or to extend the postponement."

Meanwhile, the burden charge imposition targets are estimated to be 63 complexes nationwide, totaling about 38,000 households.