Seongnam City Secures 373.1 Billion Won Pangyo Development Charge in Final Supreme Court Victory Over LH After 4-Year Legal Battle

Supreme Court: "373.1 Billion Won Development Charge is Lawful"
Appeal by Korea Land & Housing Corporation Dismissed
Principle of Reclaiming Development Gains for Citizens Reaffirmed

The four-year legal dispute between Seongnam City and Korea Land & Housing Corporation (LH) over the Pan-gyo New Town development charge has ended in a final victory for Seongnam City. The Supreme Court dismissed LH's appeal, confirming that the 373.1 billion won development charge levied by Seongnam City was lawful.

A panoramic view of Pangyo New Town. Provided by Seongnam City

On July 16, the Supreme Court dismissed LH's appeal and upheld the decision of the lower court. As a result, the charge of approximately 373.1 billion won—imposed by Seongnam City for the Pan-gyo housing site development project after subtracting LH’s actual development expenses, such as corporate taxes, totaling about 92.6 billion won—has been definitively acknowledged as valid.

This litigation began when Seongnam City imposed a development charge of approximately 465.7 billion won on the Pan-gyo housing development project in April 2022, and LH filed an administrative lawsuit in July of that year to have it reversed.

The main issue was the calculation method for development gains. LH argued that land developed for rental housing should also be included in the calculation, and that the total development charge should therefore be reduced to around 290 billion won. However, the lower court, the appeals court, and now the Supreme Court all rejected this argument, confirming that Seongnam City’s calculation method was legal in all three instances.

As a result of this ruling, the already paid 373.1 billion won development charge will remain unchanged. The court effectively acknowledged the legitimacy of Seongnam City’s levy of the development charge in order to reclaim development gains for the public, in accordance with relevant laws.

The development charge is a system that allows the government to reclaim a portion of unearned development gains, such as those arising from housing site development projects, and redistribute them for the benefit of society. This ruling is seen as reaffirming the principle of public recapture of development gains while also strengthening the authority of local governments to impose such charges.

A Seongnam City official stated, "This decision is meaningful in that it once again confirms the principle that development gains should be fairly returned to citizens," adding, "We will continue to strictly and fairly operate the development gains recapture system in accordance with the law, doing our utmost to enhance citizens' rights and serve the public interest."

This content was produced with the assistance of AI translation services.