| Title |
Profitability Analysis of Urban Redevelopment Projects by Applying Tax Increment Financing |
| Keywords |
Urban Renewal Project ; Urban Redevelopment ; Tax Increment Financing ; Property Tax ; Profitability Analysis |
| Abstract |
In this study, the feasibility of applying TIF(Tax Increment Financing) to Urban redevelopment projects was studied in order to activate urban redevelopment projects. For this purpose, firstly, the general redevelopment pattern was drawn. And secondly, the tax increments of the redevelopment before and after was estimated. and it was analysed that the annual net tax increments was up to about 400million won, and through 25 years of TIF periods, the TIF bond money amounted to about 7.2 billion won. And thirdly, the pre-investment of TIF money could increase the IRR(Interal Rate of Return) from 11.16% to 12.52% that's close to 13% which makes the private development possible. and lastly, it was analysed that the TIF money's investment could substitute for 755% of discount rent of lenders, 84% of public infrastructure cost, 42.8% of landlord's compensation cost, 42.6% of the gross floor area, and 14.9% of construction cost, etc. As was stated above, the TIF may be an effective public financing method to improve urban deteriorated areas. |