The costs of appeal are assessed against the defendant.

1. Article 99-3 (1) 2 of the former Restriction of Special Taxation Act (amended by Act No. 6762 of Dec. 11, 2002; hereinafter the same "former Restriction of Special Taxation Act") provides that where a resident constructs and transfers a newly-built house for which approval for use has been granted from May 23, 2001 to June 30, 2003 after the lapse of five years from the date of its acquisition, the special taxation that shall deduct the transfer income accrued for five years from the date of acquisition of the newly-built house from the income amount subject to taxation of transfer income tax shall be provided, but if the newly-built house corresponds to the "high-class house excluded from the object of non-taxation of transfer income tax under Article 89 (3) of the Income Tax Act", it shall be excluded from the object of taxation.

In addition, Article 29(1) of the Addenda of the Restriction of Special Taxation Act amended by Act No. 6762 of December 11, 2002 and enforced on January 1, 2003 (hereinafter "the Addenda of this case") provides that "where a newly-built house constructed by itself and approved for use is transferred after this Act enters into force under the former provisions of Article 99-3(1), the previous provisions shall apply to the calculation of income amount subject to capital gains tax, notwithstanding the amended provisions of Article 99-3(1), and in this case, the high-class house standard at the time of obtaining approval for use as a newly-built house is applied."

On the other hand, Article 156 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 17825, Dec. 30, 2002; hereinafter the same shall apply) which stipulates the standard of high-class housing excluded from the object of non-taxation of capital gains tax under delegation by Article 89 subparagraph 3 of the former Income Tax Act (amended by Act No. 6781, Dec. 18, 2002; hereinafter the same shall apply) provides that a single house with a standard market price of at least 40,00 won and with a total floor area of at least 264 square meters of housing or appurtenant land (hereinafter referred to as a "incidental land") with a total floor area of at least 495 square meters at the time of transfer of the house and appurtenant land (including multi-family house under subparagraph 1; excluding the case where a multi-family house is deemed to be a single house under Article 155 (15) of the same Act; hereinafter the same shall apply) provides that a multi-family house shall be one of high-class houses.

2. Based on the reasoning of the judgment of the court of first instance, the court below acknowledged that the Plaintiff constructed the instant house which is a multi-family house and obtained approval for use on October 00, 200 and completed registration of preservation of ownership on October 00, 200 and transferred the instant house and its appurtenant land to KRW 1/200,000 in aggregate for each of 1/2 equity shares to 000 and 000, respectively after the Plaintiff’s completion of registration of preservation of ownership on October 0, 200. Furthermore, the court below determined that the Plaintiff’s transfer of the instant house to the high-class housing under Article 89 subparag. 3 of the former Income Tax Act, Article 156 of the former Enforcement Decree of the Income Tax Act, and Article 99-3(1) of the former Enforcement Decree of the Restriction of Special Taxation Act by misunderstanding the legal principles on the instant house under Article 99-3(1) of the former Enforcement Decree of the Restriction of Special Taxation Act to the high-class housing that did not fall under the issue of the Plaintiff’s sale and sale of the instant house.

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.