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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteSouth Korea’s Korea Land & Housing Corporation (LH) is reviewing a surcharge of up to 9.5% on above-ground construction costs for public presale apartments covered by the presale-price cap. The proposal has not been shown to be formally adopted: it is an internal review reported on 11 October 2026, based on materials attributed to LH. The maximum would apply only if all relevant components were included.
What LH is reviewing
The reported proposal would add a “project method surcharge” to construction costs used in the price-cap calculation for public presale housing. The 9.5% figure is a reported maximum, not a blanket increase for every project or a confirmed change to the rules. Yonhap’s 11 October 2026 report and ChosunBiz’s same-day coverage describe LH as reviewing the measure.
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| Reported component | Rate | Qualification |
|---|---|---|
| Contract method under the National Contract Act | 5% | Reported as a component of the proposed surcharge. |
| Homes with exclusive area of 60 square meters or less | 3% | Applies to the reported small-home category. |
| Fees, including Public Procurement Service entrusted-contract fees | 0.5–1.5% | Reported range; the applicable amount depends on the fee item. |
| Maximum combined surcharge | Up to 9.5% | Reached only if all applicable components are included; the proposal concerns above-ground construction costs. |
The components are not evidence that every home would receive the full maximum. The available reporting does not establish a final project-by-project calculation method.
Why LH says it wants the change
LH’s argument is that construction costs have risen enough to undermine the viability of public presale and renewal projects. It says that if costs are not reflected, projects could be delayed or the supply of public housing reduced. LH also argues that recovering more costs could help fund housing supply and narrow the difference between capped prices and market prices, potentially reducing lottery-like gains and incentives for fraudulent applications. Those are LH’s policy arguments, not established effects of the proposal.
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LH reported 2025 building-construction costs of 14,077,000 won per 3.3 square meters of supply area, compared with a basic-construction-cost adjustment reference of 11,801,000 won per 3.3 square meters, a reported difference of 2,276,000 won. The first figure is attributed to LH’s 2025 cost; the second is a reference value reported in 2026. The underlying calculation workbook was not available for independent reconstruction, so the comparison should be read as LH’s reported figures rather than an independently audited calculation. ChosunBiz reports the comparison.
What the Goyang examples do—and do not—show
LH’s simulation for one project district in Goyang showed higher construction-cost ceilings under the maximum-surcharge scenario:
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| Exclusive unit area | Ceiling before surcharge | Simulated ceiling with maximum surcharge | Change |
|---|---|---|---|
| 59 square meters | 323.4 million won | 342.8 million won | 19.4 million won, or 6.0% |
| 84 square meters | 400.4 million won | 416.5 million won | 16.1 million won, or 4.0% |
These are project-specific simulated construction-cost ceilings, not forecasts of final sale prices across South Korea. LH says a presale-price review committee sets the final price after considering the ceiling, verification, nearby market prices, and sale conditions. A higher ceiling therefore does not by itself establish that the final price will rise by the same amount. Yonhap’s report describes the examples and LH’s account of the review process.
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Article 57 of South Korea’s Housing Act provides the statutory framework: capped sale prices comprise land cost and construction cost, while subordinate rules govern detailed items and calculation methods. The cited version took effect on 8 September 2026. The reported surcharge review should not be confused with an amendment already incorporated into the Act or its implementing rules. Korea Law Information Center: Housing Act, Article 57.
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The scale of public procurement helps explain why construction-cost policy matters to public housing, but it does not verify LH’s surcharge calculations. The Public Procurement Service announced a 2026 LH public-housing works, design, and construction-management procurement plan totaling 8.0031 trillion won across 126 contracts, 22.4% above 2025. That institutional figure is not proof of project distress or of a consumer-price effect. Public Procurement Service announcement, 11 March 2026.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.The central policy trade-off
The proposal pits project continuity and public-housing supply against affordability for prospective owner-occupiers. Better recovery of verified construction costs could make some projects more viable, as LH argues; adding costs to the price-cap calculation could also put upward pressure on allowable prices. How much of that reaches buyers depends on the applicable components, verification, and the committee’s final pricing decision.
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Kang Dae-sik, a People Power Party lawmaker on the National Assembly’s Land Infrastructure and Transport Committee, urged objective verification rather than shifting costs too readily to buyers: “Actual construction costs incurred should be reflected after objective verification, but the burden should not be easily shifted onto end users without homes.” His concern goes directly to the unresolved question of how LH’s reported cost figures and proposed charges would be checked. ChosunBiz reported his comment.
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What to watch next
- Whether LH moves beyond internal review: the cited coverage does not establish adoption or a later formal decision.
- Whether a formal instrument changes the calculation rules: a confirmed measure would need to be distinguished from the existing statutory framework and subordinate rules.
- How charges are verified and applied: the available reports do not provide LH’s underlying calculation tables or a complete project-level methodology.
- Whether announced ceilings affect final prices: the committee’s review considers more than the ceiling alone, so a simulated construction-cost increase is not a final sale-price result.
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