In South Korea’s real estate market, one policy has been causing a stir lately— the Reconstruction Excess Profit Reclamation System , commonly known as "Jaechohwan." Many homeowners and investors view this policy as an obstacle because it significantly impacts redevelopment projects, especially in urban areas. But despite its importance, there’s still a lot of confusion about how it works, how much people actually have to pay, and what’s happening right now in the market. This guide will break it all down—what Jaechohwan is, how it’s calculated, real-life examples, its effects on the housing market, and what to watch for in future policy decisions. What Is the Reconstruction Excess Profit Reclamation System? Simply put, this system taxes a portion of the profit when a homeowner’s redevelopment gains exceed a certain threshold. How It’s Calculated: The profit is determined by the difference in housing prices between the time the reconstruction association is establish...