Seongnam-si Partially Wins First Trial in Lawsuit Against LH Over Pangyo Development Charges

Court Rules "Imposing 373.1 Billion KRW Excluding Corporate Tax is Justified"
Effectively a Victory for Public Interest

Seongnam City, Gyeonggi Province (Mayor Shin Sang-jin) announced on the 11th that it received a partial victory in the first trial of an administrative lawsuit related to the imposition of the Pangyo development charge.

Seongnam City Hall exterior. Provided by Seongnam City.

This lawsuit was filed by the Korea Land and Housing Corporation (LH), the project implementer, in August 2022, challenging the imposition of a total development charge of 465.7 billion KRW by Seongnam City for the Seongnam Pangyo housing development project. Seongnam City engaged in intense legal battles for two years and eight months.

The key issue in the trial was the "standard for calculating development profits." Seongnam City argued that the imposed amount of 373.1 billion KRW, calculated based on development profits excluding corporate tax, was justified. However, LH claimed the development charge should be around 290 billion KRW and requested a reduction in the imposed amount.

In response, the Administrative Division 3 of Suwon District Court (Presiding Judge Kim Eun-gu) ruled, "The portion of the development charge exceeding 373.1 billion KRW imposed by the defendant (Mayor of Seongnam) on the plaintiff (LH) is canceled, and the rest of the plaintiff's claims are dismissed."

A Seongnam City official positively evaluated the ruling, stating, "The court recognized 92.6 billion KRW of corporate tax as part of development costs but judged that the city's imposition of the development charge on the remaining amount of 373.1 billion KRW was lawful according to the law, which effectively means a victory for the city."

Meanwhile, Seongnam City imposes development charges based on fair and reasonable standards according to relevant laws to ensure the public return of development profits. The city plans to continue its best efforts in fair administrative execution to protect citizens' property rights and realize public interests.