Public Redevelopment Fee Temporarily Cut to 1%; 13 Billion Won in Savings Expected per District

Temporary fee reduction through December 31, 2027
Existing government subsidy of up to 15% of fees to remain

The government will temporarily cut the project fee rate for public redevelopment from 3% to 1% for areas that newly apply to be considered as candidate sites through the end of next year. The fee burden is expected to fall by an average of 13 billion won per area.

The Ministry of Land, Infrastructure and Transport and the Korea Land and Housing Corporation (LH) announced on November 12 that they would lower the project fee rate from 3% to 1% of total project costs for areas that newly apply to be selected as public redevelopment candidate sites by December 31, 2027. The measure follows up on the "Housing Fast-Track Supply Plan" announced on August 13, 2026.

The Asia Business Daily DB

Under public redevelopment, public corporations such as LH participate as project implementers in place of resident associations. LH has charged a fee equal to 3% of total project costs in return for managing the project as a whole, from securing permits and reviewing designs to estimating construction costs and overseeing construction.

The measure is expected to reduce the fee burden by an average of about 13 billion won per area. For example, for a project involving 2,200 homes with total costs of 720 billion won, the fee will fall from 21.6 billion won to 7.2 billion won. The existing government subsidy program will also remain in place. If up to 15% of the fee is subsidized, residents' actual burden will fall to as little as 0.85% of total project costs.

The reduced fee rate will apply to areas that apply for new candidate-site selection by the end of next year. Areas that had previously pursued redevelopment through a private-sector approach can also receive the benefit if they apply to become public redevelopment candidate sites within that period.

In addition to the fee reduction, areas will also be eligible for the support measures already available for public redevelopment. The floor area ratio may be increased to up to 1.2 times the legally permitted maximum, and the projects will be exempt from the price cap on new housing. If annual interest rates on project-cost and relocation loans exceed 1.8%, the government will subsidize up to 2 percentage points of the excess interest.

Yoon Youngjung, director general for housing redevelopment policy at the Ministry of Land, Infrastructure and Transport, said, "This fee reduction will further ease the burden on residents who want to pursue public redevelopment. We will work actively with relevant agencies to ensure that public redevelopment, in which the public sector takes responsibility for and manages projects, can serve as a practical alternative for redevelopment projects."

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