Plaintiff

Head of Sungbuk Tax Office

November 3, 2006

Seoul Administrative Court Decision 2005Gudan7924 decided Feb. 8, 2006

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The Defendant’s disposition of imposition of capital gains tax of KRW 4,777,290 against the Plaintiff on August 10, 2004 is revoked.

2. Purport of appeal

The same shall apply to the order.

1. Facts of recognition;

A. On June 10, 1998, the Sindo Housing Redevelopment Partnership was established for the purpose of implementing a housing redevelopment project to build apartment houses with 454 households on the land of 22,593 square meters on the land of 348 square meters in the Dong-dong, Dongjak-gu, Seoul on June 10, 199, and was authorized by the management and disposal plan pursuant to Article 34(1) of the former Urban Redevelopment Act (amended by Act No. 6852, Dec. 30, 2002; hereinafter the same shall apply) on October 12, 2001.

B. Around March 17, 1978, the Plaintiff acquired a co-ownership of 38.420 square meters and 10.940 square meters and 10.940 square meters and 38.420 square meters and 10.940 square meters and above of the same road (number 2 omitted). Each of the above lands was incorporated into the project site of the redevelopment project implemented by the redevelopment association, thereby becoming a co-owner of each of the above lands as well as Nonparty 1.

C. On December 3, 2001, the Plaintiff and Nonparty 1 entered into a supply contract with the above redevelopment cooperative, with the content that they will be supplied with the Dong-dong 348 Gi-dong 348 Gi-dong, Dongjak-gu, Seoul, and that they will additionally bear KRW 117,365,594, which is the difference between the Plaintiff and Nonparty 1’s rights.

D. On December 17, 2003, the above redevelopment cooperative obtained the authorization of the completion of the above redevelopment project from the head of Dongjak-gu, and on April 27, 2004, the plaintiff and the non-party 1 concluded a sales contract with the non-party 2 on the purchase and sale of the apartment of this case (hereinafter "transfer of this case"). At the time of transfer, the apartment of this case was not transferred to the non-party 2 under Article 54 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter "transfer notification, etc."), and the transfer notification was made on September 6, 2004 thereafter. The registration of the preservation of ownership of the apartment of this case was made in the name of non-party 2 on October 1, 2004.

E. Meanwhile, on October 26, 2001, at the same time, the Housing Redevelopment Cooperatives in the 3rd Do has concluded a sales contract and received the down payment by receiving an offer from applicants with certain qualifications such as subscription deposit from the members of the National Assembly on October 30, 2001 after obtaining an approval of the tenant invitation from the head of the Dongjak-gu Office, and by making a decision on the winner around that time, it was possible to conclude a sales contract and receive the down payment. On June 2004, the Plaintiff accepted an application for reduction or exemption without notifying the Plaintiff of the amount of capital gains tax corresponding to 189-3 (1) of the former Restriction of Special Taxation Act (amended by Act No. 6762, Dec. 11, 2002; hereinafter referred to as the "former Act"), but the Defendant rejected the application for reduction or exemption by 00% for the reason that the transfer in this case constitutes the subject of special taxation under Article 99-3 (1) of the former Act.

[Ground of recognition] Facts without dispute, Gap evidence 1-1, Gap evidence 2-12, Eul evidence 1-1, the purport of whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

As at the time of the transfer of the instant apartment, the subject of the transfer of the instant apartment is not a “right to acquire real estate (right to purchase ownership)” but a real estate itself, and even if approval for use or inspection for use has been made after the new house acquisition period and there is no room to apply Article 99-3(1)2 of the former Act to the instant apartment, the transfer income tax shall be exempted pursuant to Article 99-3(1)1 of the former Act and Article 99-3(3) of the Enforcement Decree of the same Act, since it was concluded a sales contract with respect to the general supply of 189 households remaining after the previous house development association supplied to its members during the period from November 5, 201 to the 10th of the same month during the new house acquisition period and received the down payment.

(b) Related statutes;

It is as shown in the attached Form.

(c) Markets:

Article 99-3 (1) of the former Act provides that the amount of tax equivalent to 100/100 of capital gains tax on the income accruing from transfer within five years from the date of acquisition by a resident of a newly-built house (including the land attached to the same house, which is less than twice the total floor area of the relevant building) falling under any of the following subparagraphs shall be reduced or exempted. Thus, whether the Plaintiff acquired the “newly-built house” at the time of transfer of this case can be seen as having

On the other hand, Article 38(3) of the former Urban Redevelopment Act, which was enforced at the time of the approval of the management and disposal plan of this case, provides that "the implementer shall conduct a confirmation survey when the completion of construction is publicly announced and sell the land in accordance with the management and disposal plan after going through the procedure for dividing the land." Article 39(1) of the same Act provides that "the purchaser of a building site or constructed facility under an urban redevelopment project shall acquire the ownership of the building site or constructed facilities on the day following the date of the public announcement of the sale in lots under Article 38(4)." According to the same Act, the rights acquired in accordance with the management and disposal plan by a member of the redevelopment cooperative by providing the previous land, etc. to the redevelopment cooperative, shall be limited to "the right to acquire real estate" until the ownership of the building site or constructed facilities is acquired, and the rights of the members of the former land and constructed facilities are converted to the new building site or constructed facilities only after the sale in lots (see Supreme Court Decision 200Nu13931, Nov. 23, 199, 2093).

Meanwhile, Article 54 (1) and (2) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents does not stipulate that the ownership of the site or constructed facilities belongs to the number of buyers on the day following the public announcement of the sale order or the public announcement of the sale order. However, Article 54 (1) and (2) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents provides that "the project implementer shall, when public announcement of the construction completion is made, conduct a land confirmation survey without delay, notify the person entitled to the sale of the site or building, and shall transfer the ownership of the site or building to the head of the Si/Gun after public announcement of the ownership transfer of the site and the ownership of the building to the non-party 2, unlike the former Urban Redevelopment Act, the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, which is enacted and implemented on July 1, 2003, shall be deemed to have been transferred to the non-party 1, who is the owner of the new apartment or newly constructed apartment, and it is difficult to view that the new redevelopment plan and public announcement of the ownership is still impossible to be made.

Therefore, the Plaintiff’s assertion based on the premise that the subject of the transfer of this case is not the right to acquire real estate, but the real estate itself, is without merit.

3. Conclusion

Therefore, the plaintiff's claim seeking the revocation of the disposition of this case is dismissed on the ground that the special taxation under Article 99-3 (1) of the former Act is applied to the transfer of this case. The judgment of the court of first instance with different conclusions is unfair, and it is so revoked and it is so decided as per Disposition.

Judges Choi Jin-su (Presiding Judge)