Reconstruction Excess Profit Recapture System
재건축초과이익환수제
A South Korean levy system, introduced by the Roh Moo-hyun administration in 2006 under Article 122 of the Constitution (the public concept of land), that recovers 10–50% of excess profits accruing to reconstruction-project association members when per-member average gains exceed a threshold. Designed to return unearned windfalls from apartment reconstruction to public funds for housing stability and social equity, the system was suspended for nearly a decade under the Lee Myung-bak and Park Geun-hye administrations, effectively nullifying it. Reinstated in 2018 and upheld as constitutional by the Constitutional Court in December 2019 (2014Hun-Ba381), it was substantially hollowed out in 2023 when the exemption threshold was raised from 30 million to 80 million won, all but eliminating the levy for most reconstruction projects.
Sources
- kbthink.com KB Think overview of the system: 2006 introduction, 2012–2017 suspension, 2018 reinstatement, 2023 amendment raising threshold to 80 million won
- yna.co.kr Yonhap News (2019.12.27): Constitutional Court 6:2 ruling upholding the law; details of burden calculation and association reactions
- ccourt.go.kr Constitutional Court of Korea, 2014Hun-Ba381 ruling (2019.12.27): full judgment text affirming the system does not violate the Constitution, with majority opinion and 2-justice dissent
- oecd.org OECD Economics Department Working Paper No. 613 (2008): 'imposition of charges (a quasi-tax) up to 50% of re-development gains in March 2006'
- elaw.klri.re.kr Korea Law Translation Center: Enforcement Decree of the Restitution of Excess Rebuilding Gains Act (official English translation)
- pressian.com Kim Nam-geun, Pressian (2018.04.09): legal and historical analysis of the system's background in the public concept of land, the Roh Tae-woo administration's land public concept three laws, and the reconstruction profit recapture rationale