The development with filling method might increase the flood risk and damage in the surrounding areas, especially in low-lying areas. The objective of this study was to develop a methodology to assess the damage of flood risk transfer effect on surrounding areas. We studied a development located in Tainan, Taiwan and applied a SOBEK model to analyze the transfer effect of flood risk, and calculated the amount of loss in the surrounding land. After land development, the risk of flooding in the development zone declined. However, the risk of flooding in the southern area of the development zone increased. The development of land changed the original decentralized drainage system to centralized drainage system. The peak outflow discharge of surface runoff increased so much that it was more than the flow capacity of the downstream channel. This resulted in transferring the flood risk to the surrounding areas. Direct losses due to floods for industrial, commercial, residential, and agricultural lands as well as public facilities were calculated by the flood damage curves. Indirect losses were estimated using the industry-related model. The expected annual damages before and after land development in the southern area of the development zone were NT$ 6.38 million and NT$ 7.39 million, showing that the expected annual damage was increased by NT$ 1.01 million after land development.