The city of Suwon in Gyeonggi Province has achieved results by conducting a comprehensive survey of various development projects and imposing development charges amounting to 11.1 billion KRW.
On the 11th, Suwon City announced that from January to December of last year, it actively administered development charges by requesting authoritative interpretations from the Ministry of Land, Infrastructure and Transport on ambiguous issues such as whether development costs should be recognized when imposing development charges on housing construction projects, and by consulting with the city’s legal advisors, resulting in the imposition of 11.1 billion KRW in development charges.
Additionally, the city auctioned off real estate seized from corporations delinquent in paying development charges and guided and encouraged corporations undertaking development projects to prepay development charges, collecting 2 billion KRW from imposed development charges.
The development charge system is designed to recover and appropriately distribute development gains arising from land. It is a system to prevent land speculation and promote the efficient use of land.
In Suwon City, development projects subject to development charges are those with licensed land areas of 990㎡ or more within urban areas. Development projects involving land category changes, construction projects, and development activity permits impose 25% of development gains on the project implementer, while large-scale development projects such as housing site development and housing construction projects impose 20% of development gains.
Development gains are calculated as the land price at the time of charge completion (the price of the land after the development project is completed) minus the land price at the time of charge commencement (the price before the development project), development costs, and the normal land price increase during the project period.
Projects subject to development charges must submit a detailed statement of development costs to Suwon City within 40 days from the date of permit completion. Failure to comply results in a fine of up to 2 million KRW.
Development charges are imposed through procedures including review of various permits and completion documents, notification of projects subject to charges, verification of detailed development cost statements, deliberation and decision on the land price at the completion time by the Real Estate Price Public Notice Committee, notification of planned charges, and notification of charges.
A Suwon City official stated, "We have established organic cooperation by consulting with related departments on development charge subjects from the development project permit process and conducted a comprehensive survey of development charge subjects. We will continue to actively administer to ensure no subjects are omitted and charges are imposed timely, contributing to securing tax revenue."
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