[Economic Term] Development profit

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Today's economic term is development profits.

Sometimes, you see news about development profits or recovery of development profits.

So today, I would like to introduce the contents of the “Act on Recovery of Development Profits” (abbreviated name: Development Profits Recovery Act).

First, let’s check the development interests and related definitions stipulated in the law.

Article 2 (Definition) The meanings of terms used in this Act are as follows.
1.“Development profits” refers to a person (hereinafter referred to as “project implementer”) who implements a development project in excess of the increase in normal land price due to the implementation of a development project, change in land use plan, or other social and economic factors. It refers to the increase in the value of land belonging to the landowner.
2.“Development project” refers to a project under Article 5, such as a housing site development project or industrial complex development project, that is implemented with approval, permission, license, etc. (including reports, hereinafter referred to as “approval, etc.”) from the state or local government. says
3.“Normal land price increase” refers to the interest rate on fixed deposits of financial institutions or the average land price change rate surveyed by the Minister of Land, Infrastructure and Transport pursuant to Article 19 of the Act on Real Estate Transaction Reports (the average land price of the city/county/autonomous district to which the land subject to the development project belongs). Refers to the amount calculated according to the standards prescribed by Presidential Decree, taking into account the rate of change), etc.
4.“Development charge” refers to the development profits levied and collected by the Special Self-Governing City Mayor, Special Self-Governing Province Governor, Mayor, County Governor, or District Head (District Head refers to the head of an autonomous district; hereinafter referred to as “Mayor, County Governor, or District Head”) in accordance with this Act. It says the amount.

If you look at the definition of the law, you can see that development profits are mainly related to development projects, and development projects are related to projects implemented by the government or local governments.

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