[Reconstruction Rationalization Plan] Reconstruction Charge of 100 Million Won Reduced by 85% to 15 Million Won

Announcement of Rationalization Measures for Reconstruction Charges

Photo by Asia Economy

The reconstruction surcharge of 100 million KRW scheduled for certain complexes will be significantly reduced to 15% of the original amount, down to 15 million KRW, if held for more than 10 years. Among the 84 complexes nationwide where the surcharge is anticipated, the surcharge will be fully exempted in 38 locations.

On the 29th, the Ministry of Land, Infrastructure and Transport announced the "Rationalization Plan for Reconstruction Surcharges," which includes △realignment of surcharge imposition standards △adjustment of the surcharge commencement timing △significant reduction of surcharges for long-term owners of single homes.

First, the exemption amount for the surcharge will be raised from the existing 30 million KRW to 100 million KRW, reflecting the recent sharp rise in housing prices. The surcharge brackets, previously divided in increments of 20 million KRW, will be expanded to increments of 70 million KRW.

When calculating excess profits, the starting point has been adjusted from the previous "approval date of the promotion committee formation" to the "approval date of the association establishment." Since the starting point is postponed, the association can reduce the amount of excess profits, thereby lowering the surcharge.

As of July, there are 84 complexes nationwide where surcharges are scheduled. Changing the starting point for excess profit calculation will exempt surcharges in 38 complexes. In particular, in provincial areas, 21 out of 32 complexes will be exempted, indicating a significant reduction effect in those regions.

A new reduction system has also been introduced for long-term owners of single homes. Currently, surcharges are imposed uniformly regardless of the housing ownership period, but going forward, single-home households can receive reductions of up to 50% depending on the holding period.

Based on a complex notified of a 100 million KRW surcharge, applying the improved plan will reduce the surcharge to 30 million KRW due to the realignment of imposition standards (-70 million KRW). Additionally, if a 50% reduction for long-term ownership over 10 years is applied, the surcharge will further decrease to 15 million KRW. This represents an 85% reduction effect.