For a land development project in Korea, the wide-area transport facility levy is calculated by multiplying the standard development cost of 299,350 won per square metre of project area by a rate of 7.5%, then multiplying again by the floor area ratio divided by 200. In other words, a floor area ratio (FAR) of 200% is the baseline, and the levy scales proportionally above and below it.
The developer pays it. But because it enters the cost base of the land, it passes through the sale price to whoever buys the new apartment first. For an end user, the practical question is how much of it lands in the price.
Who pays, and what it funds
The levy funds wide-area transport infrastructure — regional rail lines and arterial roads — inside metropolitan areas covered by a formally adopted wide-area transport plan. Local government guidance lists six categories of liable project: housing site development, urban development, land preparation and apartment district development under the Housing Act, housing construction, redevelopment and reconstruction projects, and mixed-use buildings combining non-residential facilities with 20 or more dwellings.
The obligation falls on the project operator. Assessment occurs within 60 days of the project's approval or authorisation, and payment is due within one year of assessment, with settlement required before the application for use approval.
The formula splits in two by project type. Projects that prepare land use project area and FAR; projects that erect buildings use gross floor area.
| Project type | Formula | Rate |
|---|---|---|
| Housing site / urban / apartment district development | Standard development cost × rate × project area × (FAR ÷ 200) − deductions | 7.5% |
| Housing construction (net floor area 85㎡ or less) | Standard construction cost × rate × gross floor area − deductions | 1% |
| Housing construction (over 85㎡) | Standard construction cost × rate × gross floor area − deductions | 1.5% |
| Non-residential floor space (mixed-use, etc.) | Standard construction cost × rate × gross floor area − deductions | 2% |
Both standard costs are published by the Minister of Land, Infrastructure and Transport. The standard development cost notice currently in force is Notice No. 2024-192, effective 1 July 2024, setting the figure at 299,350 won per square metre.
Why the formula pivots on 200%
The striking term in the formula is (FAR ÷ 200). At a FAR of 200% this equals 1 and leaves the levy untouched; at 300% it becomes 1.5, at 150% it becomes 0.75. Building higher on the same land adds residents and therefore transport demand, and a single coefficient carries that logic.
Converting to a per-dwelling basis produces a more interesting result. With project area A and FAR r (in percent), the levy is 299,350 × 0.075 × A × (r ÷ 200), while gross floor area is A × (r ÷ 100). Divide the levy by floor area and both A and r cancel out.
What remains is 299,350 × 0.075 ÷ 2 = 11,225.6 won. The levy on a land development project is therefore fixed at 11,226 won per square metre of gross floor area, whatever the FAR. A higher ratio raises the total, but it raises the dwelling count in step, so the burden per household does not move.
The levy grows with floor area ratio — and so does the number of households. The share per dwelling is fixed from the start.
What a 100,000㎡ project costs per household
Applying the formula to a project area of 100,000㎡, with deductions set to zero and gross floor area per dwelling assumed at 110㎡ (a net 84㎡ apartment plus its share of common area):
| FAR | Total levy (KRW) | Gross floor area (㎡) | Estimated dwellings | Per dwelling (KRW) |
|---|---|---|---|---|
| 150% | 1,683,843,750 | 150,000 | 1,363 | 1,235,400 |
| 200% | 2,245,125,000 | 200,000 | 1,818 | 1,234,900 |
| 250% | 2,806,406,250 | 250,000 | 2,272 | 1,235,200 |
| 300% | 3,367,687,500 | 300,000 | 2,727 | 1,235,000 |
The total doubles between 150% and 300%, but the per-dwelling figure stays in the 1.23 million won range. The few hundred won of variation is rounding.
Set against the sale price, the scale becomes clear. With the standard construction cost for a net 84㎡ unit running in the tens of millions of won, a levy of 1.23 million won is a little over 1% of it. Compared with the amount that moves when the standard construction cost is revised once, the levy itself is far more stable.
This covers only the land development stage. Housing construction on the prepared site attracts its own levy based on the standard construction cost, and large sites can carry a separate contribution under a wide-area transport improvement plan. The transport-related cost actually embedded in a sale price is the sum of all three.
How much redevelopment projects save
Reductions vary by the nature of the project. Projects carried out by national or local government receive a 50% reduction. Redevelopment and reconstruction projects also receive 50% as a baseline, rising to 75% when carried out in designated urban areas — reflecting a judgement that redeveloping existing built-up land generates less new wide-area transport demand.
Deductions reduce the total as well. Where the project operator builds wide-area transport facilities directly or funds their construction, that amount is subtracted from the levy. A development that delivers its own road or station connection can see the charge fall sharply.
Applying the reduction rates to the earlier example (FAR 200%, total 2.245 billion won, 1,818 dwellings) gives 1.23 million won per household with no reduction, 620,000 won at 50%, and 310,000 won at 75%. On identical project scale, the operator and project type alone create a spread of 920,000 won per household.
Reconstruction estates also face a separate levy on excess gains. The two mechanisms differ entirely in purpose and method despite the similar names. Unlike the way the reconstruction excess-gain levy works through an exemption threshold and graduated brackets, the wide-area transport levy has neither.
What to check
- The land cost line in the sale announcement — the levy sits inside the land preparation cost and arrives as land cost. Look at the basis of calculation disclosed in the announcement.
- Project type and operator — whether it is a public housing site development or a private urban development decides the 50% reduction.
- FAR and dwelling count together — a large total with a large dwelling count leaves the per-household burden unchanged. Do not read the headline total alone.
- Whether a wide-area transport improvement plan applies — sites above a certain scale carry a separate contribution under that plan. It is a different mechanism from the levy.
- Deduction records — if the operator built roads or station facilities directly, the levy is reduced accordingly. Check the district unit plan for those commitments.
- Payment timing — one year from assessment, settled before the use approval application. On delayed projects this schedule interacts with the sales timetable.