[1] The meaning of "actual owner" who is a taxpayer of property tax under Article 107 (1) of the former Local Tax Act

[2] Whether a housing association constitutes a "actual owner" who is liable to pay property tax on housing for its members (negative in principle)

[3] Whether a person who temporarily manages property constitutes "user" under Article 107 (3) of the former Local Tax Act (negative)

[4] Requirements for a taxation disposition to become void as a matter of course, and the method to distinguish whether the defect of the disposition is significant and obvious

[5] The case holding that in a case where Gap reconstruction association obtained a provisional disposition that "it is permitted to temporarily move into the house allocated according to the result of the existing building and unit drawing, but it does not be deemed that the house or unit drawing was sold in lots," and that Gap association imposed property tax on Eul association because it was actually an owner of the apartment house during the period from the approval date of use to the completion date of registration of ownership preservation, in the case where Eul association imposed property tax on Eul association because it was deemed that it was an owner of the apartment house after obtaining a permit for use prior to the completion date from the head of the Gu, and the final judgment that the house or unit drawing becomes null and void, even though there was a final judgment that the above and unit drawing was made, it shall be deemed that the defect of the disposition is grave and obvious and

[1] Article 107(1) of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014) provides that “A person who actually owns any property as of the property as of the property tax base date shall be liable to pay property tax” (Article 183(1) of the former Local Tax Act (wholly amended by Act No. 1021, Mar. 31, 2010); “ de facto owner” who is the person liable to pay property tax refers to a person who actually holds the ownership of property regardless of whether it is registered as an owner on the public register.

[2] A housing association bears the duty to have its members acquire the ownership of a house for its members under its bylaws, etc., so it cannot, in principle, dispose of it against the will of its members or use it or profit from it. After the construction of a new house for its members, an association member registered as the first owner pursuant to Article 65 subparagraph 1 of the Registration of Real Estate Act may apply for registration of initial ownership, and the housing association shall not prevent it. Meanwhile, with respect to acquisition tax, the Supreme Court deemed that a new house for its members, including a local union, workplace union, reconstruction association, etc., is not a housing association, but a association member constitutes a taxpayer of acquisition tax. Accordingly, Article 105 (10) of the former Local Tax Act amended on August 30, 1997 provides that "Real estate for the association's house for its members (referring to an apartment house, incidental, welfare facility, and land annexed thereto) acquired by the housing association for its members shall not be deemed to have been acquired by the association member, and thus, the housing association is not a person liable to pay property tax (Article 108 (1).27).

[3] Article 107(3) of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014) provides that “Where it is impossible to identify the de facto owner as of the property tax base date because ownership is unclear, the relevant user is obligated to pay property tax (Article 183(3) of the former Local Tax Act before wholly amended by Act No. 10221, Mar. 31, 2010).” A person who temporarily manages property does not fall under “user”.

[4] In order for taxation to be deemed null and void as a matter of course, it must be objectively apparent that the defect of taxation violates the important part of the law, and should be objectively apparent. In determining whether the defect is significant and apparent, the purpose, meaning, and function of the law should be examined from a teleological perspective, and at the same time, reasonable consideration of the specificity of the specific case itself

[5] The case holding that in a case where Gap association, which is a reconstruction association, obtained permission from the head of Eul for the use of collective housing reconstructed before the completion approval and made a final and conclusive judgment that the lottery is null and void, the procedure for preparing a collective building register was enforced according to the result of the initial lottery, and the members were allowed to temporarily move into the housing allocated according to the result of the existing building and unit lottery, but it does not be deemed that the housing was purchased, and the registration of preservation of ownership was completed, and the head of Eul issued a disposition imposing property tax on Gap association by deeming that the housing association is an owner of collective housing during the period from the approval of use to the completion of the registration of preservation of ownership, the association Gap association, which is a reconstruction association, cannot be deemed as a "actual owner" who is a taxpayer of property tax under Article 107 (1) of the former Local Tax Act (hereinafter referred to as the "former Local Tax Act"), and since the association is not a taxpayer of property tax imposed on Gap association members, the head of the Gu, who is a member of the association, with the objective and objective reason that it is not a taxpayer.

[1] Article 107(1) of the former Local Tax Act (Amended by Act No. 12153, Jan. 1, 2014); Article 183(1) (see current Article 107(1)) of the former Local Tax Act (Amended by Act No. 1021, Mar. 31, 2010) / [2] Articles 7(8) and 107(1) of the Local Tax Act; Article 105(10 (see current Article 7(8) of the Local Tax Act (Amended by Act No. 5454, Dec. 13, 1997); Article 2 subparag. 11 and 11 of the Housing Act; Article 65 subparag. 1 of the former Local Tax Act / [3] Article 107(1) of the former Local Tax Act (Amended by Act No. 10221, Dec. 13, 2014; Act No. 1301, Jan. 1, 20197)

[1] Supreme Court Decision 2005Du15045 Decided March 23, 2006 (Gong2006Sang, 739) / [2] Supreme Court Decision 93Nu18839 Decided June 24, 1994 (Gong1994Ha, 2139) / [3] Supreme Court en banc Decision 93Nu102 Decided April 18, 1996 (Gong196Sang, 149) / [4] Supreme Court Decision 2000Da24986 Decided July 10, 2001 (Gong201Ha, 1823)

Maritime Apartment Complex 1 Reconstruction Association (Law Firm Sol, Attorneys Hawon-won, Counsel for plaintiff-appellant)

The Intervenor joining the Plaintiff (Appointed Party)

The head of Gangnam-gu Seoul Metropolitan Government (Attorney Lee Sung-soo)

Defendant Intervenor (Appointed Party)

Seoul High Court Decision 2013Nu18140, 18157 decided January 8, 2014

The appeal is dismissed. The costs of appeal due to the participation by the Defendant are assessed against the Intervenor (Appointed Party) and the designated parties, and the remainder, including the part resulting from the participation by the Plaintiff, are assessed against the Defendant.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

A. Article 107(1) of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014) provides that “A person who actually owns any property as of the property as of the property tax base date shall be liable to pay property tax” (see, e.g., Supreme Court Decision 2005Du15045, Mar. 23, 2006). The purpose of Article 183(1) of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010); “ de facto owner” who is a person liable to pay property tax refers to a person who actually owns the relevant property regardless of whether it is registered as an owner on the public register (see, e.g., Supreme Court Decision 200

In principle, a housing association bears the duty to have its members acquire the ownership of a house for its members under its rules, etc., it cannot dispose of it against the will of its members or use it or gain profit from it. After the construction of a new building register, an association member registered as the first owner pursuant to subparagraph 1 of Article 65 of the Registration of Real Estate Act may not apply for registration of ownership preservation, and the housing association shall not prevent it. Meanwhile, with respect to acquisition tax, the Supreme Court deemed that a new building of a house for its members, including a local union, workplace union, reconstruction association, etc., constitutes a taxpayer of acquisition tax (see, e.g., Supreme Court Decision 93Nu1839, Jun. 24, 1994). Article 105(10) of the former Local Tax Act amended on August 30, 1997, which amended on the ground that the housing association does not constitute a “property tax” under Article 105(10) of the same Act, which is a person liable for tax payment.

B. The lower court acknowledged the following facts by citing the first instance judgment.

1) On March 8, 2007, the Plaintiff, a reconstruction association established under the former Housing Construction Promotion Act (wholly amended by Act No. 6916 of May 29, 2003), was reconstructed on the land outside Gangnam-gu Seoul ( Address omitted) and 24 floors above the ground, 8 apartment units with 275 households above the ground, 10 to 24 floors above the ground, 10 to 24 floors above the ground, and 1 unit and 5 floors above the ground (hereinafter “instant apartment units”) to obtain prior approval for completion from the Defendant.

2) Around that time, there was a final and conclusive judgment between the Plaintiff and the Defendant’s Intervenor, a member of the Plaintiff and the Defendant’s Intervenor, to the effect that the said apartment building becomes invalid by drawing due to the occurrence of disputes related to the procedures for drawing lots. However, around April 2, 2007, the Plaintiff notified the Plaintiff that the Plaintiff would proceed with monetary settlement procedures unless the sales contract is concluded on the same and several houses allocated to the Defendant’s Intervenor.

3) Accordingly, on August 29, 2007, the Defendant’s Intervenor was issued a provisional disposition order (hereinafter “instant provisional disposition order”) stating that “The Defendant’s Intervenor shall be allowed to temporarily move into the housing allocated according to the result of the existing unit and unit drawing on condition that the Intervenor would pay a certain amount of money, but not be deemed to have bought the unit of Dong and unit.” The Defendant’s supplementary disposition order was completed with the exception of Defendant Intervenor 5 by September 22, 2007 to March 13, 2008, which was assigned in accordance with the initial drawing result or agreed separately with the Plaintiff, after paying the sales price for the apartment of Dong and unit (hereinafter “instant apartment”), and all the registration procedure for preservation of ownership was completed by December 14, 2012 except for the Defendant Intervenor 5.

4) The Defendant initially imposed the property tax, etc. for the year 2007 or 2009 on the instant apartment on the Defendant’s Intervenor, but the judgment revoking the disposition, such as the property tax, became final and conclusive on the ground that “the Defendant’s Intervenor’s supplementary intervenor was temporarily occupied pursuant to the instant provisional disposition order before the registration of ownership preservation was completed in his name, and thus cannot be deemed as the actual owner of the instant apartment, and cannot be deemed as the employer.” After questioning the Ministry of Public Administration and Security, the Defendant issued a reply and received the reply, and then issued the instant disposition imposing the property tax from 2007 to 2012 on the Plaintiff by deeming the Plaintiff as the actual owner of the instant apartment during the period from the date the use registration was completed to the

C. Next, the lower court determined that the Plaintiff, a reconstruction association, could not be deemed as the actual owner of the instant apartment that was allocated to the members of the association and was anticipated to acquire by the members of the association, and that the Defendant’s Intervenor, who was the member of the association, could not be deemed as the owner of the property tax.

D. Although there was a somewhat inappropriate point at the time of this part of the judgment below’s explanation, the conclusion that the Plaintiff, a reconstruction association, cannot be deemed a person liable to pay property tax on the apartment of this case is justifiable as it is in accordance with the legal principles as seen earlier. In so doing, contrary to what is alleged in the grounds of appeal, the Plaintiff did not err by misapprehending

2. Regarding ground of appeal No. 2

Article 107(3) of the former Local Tax Act (amended by Act No. 12153, Jan. 1, 2014) provides that “Where it is impossible to identify the de facto owner because ownership is unclear as of the property tax base date, the user is obligated to pay property tax (Article 183(3) of the former Local Tax Act).” (See Supreme Court en banc Decision 93Nu1022, Apr. 18, 196, etc.). The same purport of Article 183(3) of the former Local Tax Act is the same before wholly amended by Act No. 1021, Mar. 31, 2010; hereinafter “former Local Tax Act” as of January 1, 2014; a person who temporarily manages the pertinent property does not fall under “user” (see Supreme Court en banc Decision 93Nu1022, Apr. 18, 199).

citing the reasoning of the judgment of the first instance, the lower court, based on the reasoning of the judgment, acknowledged the fact that the Intervenor paid the sales price in full from September 27, 2007 to February 22, 2008 with respect to the apartment of this case, which was allocated by the Defendant’s Intervenor according to the result of the pre-sale of the pre-existing Dong and Dong unit, and moved in at that time. The lower court determined that the Plaintiff, a reconstruction association, is not a “user” under Article 107(3) of the former Local Tax Act until the Defendant’s Intervenor became final and conclusive to purchase the apartment of this case.

Examining the record in light of the aforementioned provisions and legal principles, such determination by the lower court is justifiable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on “employer” who is a person liable for property tax under Article 107(3)

3. As to the third ground for appeal

In order for taxation to be called a void as a matter of course, the defect of taxation must be objectively apparent because it violates the important part of the law and must be objectively apparent. When determining whether there is a significant and apparent defect, the purpose, meaning, function, etc. of the law should be examined from a teleological perspective, and at the same time, reasonable consideration should be made on the specificity of the specific case itself (see Supreme Court Decision 2000Da24986, Jul. 10, 2001, etc.).

The court below, citing the reasoning of the judgment of the court of first instance, acknowledged the facts as stated in its holding. The disposition of this case is significant in its defect due to taxation conducted by a person who is not a taxpayer, and it does not constitute a "actual owner" who is a taxpayer for acquisition tax as to real estate acquired by a housing reconstruction association for its members pursuant to Article 7 (8) of the former Local Tax Act. The defendant was already aware that the apartment of this case was for its members, since it was notified by the plaintiff as to the apartment of this case allocated to the defendant who is a partner, and the defendant was already aware of the fact that the apartment of this case was for the defendant as a partner, and since the defendant's assistant knew that the apartment of this case would belong to a partner as part of the tax base date of acquisition tax and property tax, the defendant was merely a temporary state in which the number of buildings and houses would not be finally attributed to a partner, and it is clear that the plaintiff could not be seen as a taxpayer for registration of ownership in accordance with the building management ledger prepared by the defendant and the defendant's answer.

Examining the record in light of the aforementioned provisions and legal principles, such determination by the lower court is justifiable, and contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the invalidation of taxation

4. Conclusion

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.

[Attachment] List of the Intervenors to the Plaintiff: omitted

[Attachment] List of the Participants to be Appointed by Defendant: omitted

Justices Park Sang-ok (Presiding Justice)