Whether a house acquired by inheritance (2004) is subject to three houses

Even if a person becomes three housing owners of one household through the division of inherited property after the enforcement of the amended Act, the above transitional provisions shall apply mutatis mutandis to cases where he/she becomes three housing owners, and there is no reason to recognize the exception of heavy taxation

Scope of houses falling under three or more houses for 167-31 households under the Enforcement Decree of the Income Tax Act;

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s imposition of capital gains tax of KRW 218,048,200 against the Plaintiff as of November 11, 2005 shall be revoked.

1. Details of the disposition;

A. On July 14, 1982, the Plaintiff completed the registration of ownership transfer based on sale and purchase with respect to ○○○○ apartment-dong, ○○○○○○, ○○ apartment-dong, ○○○○, ○○○○, 1 parcel of land (hereinafter “instant 1”). On September 23, 1993, the Plaintiff completed the registration of ownership transfer based on sale and purchase with respect to ○○○○, ○○ apartment-dong, ○○○○, ○○○, ○○, ○○○, ○○○○, ○○○○, ○○○ apartment-dong, ○○○○, ○○○, ○○

B. The Plaintiff’s father, ○○○ and ○○○, the Plaintiff’s mother, owned 1/2 shares of ○○○○○ apartment on the ○○○○-dong ○○○○○○○-dong ○○○○○○○○○-dong ○○○○ (hereinafter “instant third house”). However, according to an agreement among the inheritors on June 16, 201 and the heir’s inheritance, ○○-○ shares of 1/6 shares were inherited by the Plaintiff and the heir, the new ○○-dong ○○-dong ○○, the Plaintiff and the heir.

C. After that, on August 5, 2004, the Plaintiff received the said new ○○○○ shares, and on August 30, 2004, died on August 30, 2004, the Plaintiff inherited the instant ○○ shares solely in accordance with the inheritance division agreement among the inheritors.

D. Meanwhile, on July 21, 2004, the Plaintiff entered into a sales contract that transfers the instant house No. 1 to 600,000,000 won, which is the husband of new ○○○, and the Plaintiff-type Kim○○, the Plaintiff-type Kim○, the Plaintiff, on the date of the contract, agreed to pay the down payment of KRW 50,000,000 on August 10, 2004, the intermediate payment of KRW 150,000,000, and the remainder of KRW 400,000 on August 30, 2004, respectively. The down payment and the intermediate payment were paid from each payment date to Kim○○, but the remainder was paid on September 9, 2004, and on September 15, 2004, the registration of ownership transfer of the instant house No. 1 was completed.

E. On September 9, 2004, when the Plaintiff filed a return on the tax base of transfer income from the transfer of housing No. 1 of this case, the Plaintiff voluntarily reported and paid KRW 111,050,730 of the capital gains tax calculated by applying the general tax rate to the gains from transfer calculated based on the actual transaction price. However, as of November 11, 2005, the Defendant issued the instant disposition imposing and notifying the Plaintiff of KRW 218,048,200 on the ground that the Plaintiff is a three house owner for one household.

F. The Plaintiff appealed and filed an appeal on January 31, 2006, but was dismissed on February 12, 2007.

[Based on the recognition] Evidence No. 1-1-7, Evidence No. 1-1-3, Evidence No. 1-1-3, the purport of the whole pleadings

2. The legality of the instant disposition

A. The plaintiff's assertion

The plaintiff asserts that the disposition of this case is unlawful for the following reasons.

① As of July 11, 2004, the time when the Plaintiff entered into a transfer contract for the instant housing No. 1, the Plaintiff should determine whether the instant housing constitutes three houses for one household. Therefore, the Plaintiff is not three houses for one household, the transfer income tax of which is excessive.

② The grace provisions of Article 16 of the Addenda of the Income Tax Act shall apply to those who acquire a new house by inheritance, not by the Plaintiff, even after January 1, 2004, and heavy taxation shall be excluded.

(b) Related statutes;

Income Tax Act

Article 98 (Time of Transfer or Acquisition)

In calculating gains on transfer of assets, the time of acquisition and transfer shall be determined by Presidential Decree.

Article 104 (Rate of Transfer Income Tax)

(1) A resident shall make an amount calculated by applying the tax rates under the following subparagraphs to the tax base of transfer income in the current year (hereinafter referred to as "calculated tax amount of transfer income"). In such cases, when one asset falls under two or more of the tax rates under the following subparagraphs, the highest tax rate shall apply thereto:

2-3. Housing falling under one of three houses or more for one household as prescribed by the Presidential Decree (including land annexed thereto; hereafter in this Article the same shall apply);

60/100 of the tax base of transfer income;

Addenda No. 7006, Dec. 30, 2003

Article 1 (Enforcement Date) This Act shall enter into force on January 1, 2004: Provided, That the provisions of Articles 34 (2) 3-2 and 16 (Transitional Measures against Owners of Three or more Houses for One Household) where a real estate sales businessman or a person falling under three or more houses for one household transfers a house (including land annexed thereto) acquired before this Act enters into force on or before December 31, 2004, the provisions of Articles 64, 95 and 104 (1) 2-3 shall not apply: Provided, That the same shall not apply where the relevant real estate sales businessman or a person falling under three or more houses for one household newly acquires another house on or after January 1, 2004.

Article 16 (Transitional Measures against Three or More Owners of One Household)

Where a real estate sales businessman or a person who has three or more houses for one household transfers a house (including the land annexed thereto) acquired before this Act enters into force on or before December 31, 2004, on or before the enforcement of this Act, the amended provisions of Articles 64, 95, and 104 (1) 2-3 shall not apply: Provided, That the same shall not apply where the relevant real estate sales businessman or a person who has three or more houses for one household newly acquires another house on or after January 1, 2004.

Enforcement Decree of the Income Tax

Article 162 (Time of Transfer or Acquisition)

(1) The time of acquisition and transfer under Article 98 of the Act shall be the date of liquidation of the price of relevant assets (if the transferee agrees to bear the capital gains tax and additional tax of capital gains tax on the transfer of relevant assets, excluding such capital gains tax and additional tax of capital gains tax) except in the following cases:

1. Where the date of the settlement of price is not clear, the date of registration, receipt of registration, or transfer date entered in the register, registry, list, etc.;

2. Date of receipt of the registration entered in the register, register, list, etc. where the transfer of ownership (including the registration and the opening of the name) has been made before the price is settled;

3. The date of receipt, delivery, or use and profit-making date, in cases of a long-term installment plan as prescribed by the Ordinance of the Ministry of Finance and Economy.

4. Date of issuance of the certificate of usage inspection for a building constructed by himself: Provided, That where it has been actually used or approved for use before the usage inspection, the date of actual use or that of approval for use, and where it is constructed without obtaining any construction permission, the date of actual use

5. For assets acquired by inheritance or donation, the date on which such inheritance commences or donation is received;

6. Where acquiring the ownership of real estate under Article 245 (1) of the Civil Act, the date on which an occupation of the relevant real estate commences.

○ Article 167-3 (Scope of Housing falling under Three or More Houses for One Household)

(1) The term “houses falling under three or more houses for one household as prescribed by the Presidential Decree” in Article 104 (1) 2-3 of the Act means the houses owned by one household possessing three or more houses in Korea (the houses falling under subparagraph 1 shall not be included in the calculation of the number of houses), which do not fall under any of the following subparagraphs:

(2) In applying the provisions of paragraph (1), the number of houses shall be calculated according to the following methods:

2. Jointly inherited house: The number of houses shall be calculated by making them owned by the inheritor having the largest inheritance shares, but if persons having the largest inheritance shares are not less than two, any person pursuant to the order of each subparagraph of Article 155 (3) shall be deemed to possess the relevant jointly inherited house; and

C. Determination

(1) Whether it falls under three houses for one household

Article 98 of the Income Tax Act and Article 162 (1) 1 of the Enforcement Decree of the same Act provide that the time of acquisition and transfer of assets shall be the date of liquidation of the price of assets, but in cases where the date of liquidation is unclear, the date of registration, record, or transfer recorded on the registry, registry, or list, etc. In such cases, the Plaintiff received any balance arising from the sales contract for the instant house No. 1 on September 9, 2004 and completed the registration of transfer of ownership to the transferee on September 15, 2004, as seen above. Thus, the time of transfer of the instant house No. 1 is the date of September 9, 2004.

In light of the above transfer timing, the Plaintiff owned the instant house No. 1 and the instant house No. 2 solely, and it is evident that the Plaintiff’s mother, ○○, died on August 30, 2004, constitutes three housing owners for one household, as long as 1/2 shares of the instant house No. 3 were additionally acquired in accordance with the agreement on the division of inherited property, and became the inheritor with the largest inheritance shares.

(2) Whether it constitutes an exception requirement for heavy taxation.

Article 1 of the Addenda of the Income Tax Act (Act No. 7006, Dec. 30, 2003) provides that the amended provisions of Article 104 (1) 2-3 of the Income Tax Act shall not apply to cases where three houses of one household are transferred before December 31, 2004, while it is apparent that there is no separate ground for heavy taxation exemption in cases where three houses of one household have been acquired after the enforcement of the amended Act, as the Plaintiff, and the purport of the aforementioned supplementary provisions is that the provision of the aforementioned supplementary provision provides that the three houses of one household are transferred to those who already meet three houses of one household before the enforcement of the amended Act, with one-year grace period in order to prevent infringement of trust interest arising from the establishment of a new provision of the capital gains tax, and that it is concluded that there is no ground for applying the aforementioned amended provision to cases where three houses of one household have been transferred after the enforcement of the amended Act by applying the amended Act by analogy to the above three houses of one household.

3. Conclusion

Therefore, the disposition of this case, based on the premise that the plaintiff falls under three housing owners per household, is legitimate, and the prior plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.