In a case where a person who owned apartment bonds 1 bonds and one farm house bonds transfers apartment houses, the case holding that a building falling under the " villa" under Article 112 (2) 1 of the former Local Tax Act constitutes a non-taxation practice under the administrative rules that does not regard as a house under the former Income Tax Act, and the above farm house constitutes a " villa" rather than a building used for regular residence, and thus, it constitutes a transfer of one house for one household under the former Income Tax Act.

In a case where a person who owned apartment bonds 1 bonds and one farm house bonds transfers apartment houses, the case holding that a building falling under the " villa" under Article 112 (2) 1 of the former Local Tax Act constitutes a non-taxation practice under the administrative rules that does not regard as a house under the former Income Tax Act, and the above farm house constitutes a " villa" rather than a building used for regular residence, and thus, it constitutes a transfer of one house for one household under the former Income Tax Act.

Articles 95(3) and 89 subparag. 3 of the former Income Tax Act (amended by Act No. 7837 of Dec. 31, 2005), Article 112 of the former Local Tax Act (amended by Act No. 7332 of Jan. 5, 2005), Article 84-3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 18669 of Jan. 5, 2005)

Plaintiff (Attorney Kim Dong-ap et al., Counsel for plaintiff-appellant)

Head of Yongsan Tax Office

Seoul Criminal Administration Act (Law No. 2006Gudan5703 delivered on June 28, 2007)

January 29, 2008

1. Revocation of the first instance judgment.

2. The Defendant’s imposition of capital gains tax of KRW 107,754,590 against the Plaintiff on May 31, 2005 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff, on June 23, 1983, resided in the apartment house of Seongdong-gu Seoul Metropolitan Government (hereinafter “instant apartment house”) for not less than two years after acquiring it around June 23, 1983, and sold it to KRW 800,000,000 around October 29, 2004.

B. After transferring the apartment of this case, the Plaintiff reported and paid the transfer income tax to the Plaintiff on the premise that there is no other house except the apartment of this case, the Plaintiff calculated the transfer margin of KRW 142,532,526 under Article 160(1) of the Enforcement Decree of the same Act on the ground that the said transfer constitutes a transfer of “one house for one household”, which is a high-priced house under Articles 95(3) and 89 subparag. 3 of the former Income Tax Act (amended by Act No. 7837, Dec. 31, 2005; hereinafter the same shall apply) on the premise that there is no other house except the apartment of this case, and paid KRW 20,986,377 among them.

C. Meanwhile, around November 1, 1974, the Plaintiff purchased a forest land of 104,510 square meters (hereinafter “the instant forest land”) in the name of Seongdong-gu, Seongdong-gu, Sungnam-si, and around July 14, 1976, the Plaintiff had a house of 8.25 square meters under the above ground, one story, one story of 69.33 square meters on the above ground (hereinafter “instant village housing”) and three buildings and one attached building, and had it until at the time of the transfer of the instant apartment land.

D. On May 31, 2005, the Defendant deemed that the instant apartment was owned separately from the instant apartment, and thus, the transfer of the instant apartment does not constitute a transfer of one house for one household, and thus, calculated gains from transfer by deducting KRW 226,76,592 and necessary expenses, 3,093,302, the acquisition value of the instant apartment from KRW 800,000,00,000, the transfer value of the instant apartment from KRW 226,776,592, and KRW 3,093,30,106, which is the acquisition value, as gains from transfer. Accordingly, the Defendant issued the instant disposition to correct and notify the remainder of KRW 107,74,590, which is the tax amount determined by the report of KRW 128,740,968, which is the total determined tax amount.

[Reasons for Recognition] Evidence No. 3, Evidence No. 4, Evidence No. 12, Evidence No. 1-3, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In the instant case, the Plaintiff’s housing was used as a villa by Nonparty 1’s father and used as a villa. After Nonparty 1 died in 1992, the Plaintiff’s mother continued to use it for a villa by taking a rest by Nonparty 2. This constitutes a villa in determining whether income tax is exempt due to the transfer of one house by one household under the Income Tax Act and subordinate statutes. However, the instant disposition that the Defendant regarded as a house is unlawful even though it constitutes a villa in determining whether it is exempt from income tax due to the transfer of one house by one household.

B. Relevant provisions

(1) The former Income Tax Act, which had been enforced at the time of the transfer of apartment of this case, did not have a separate provision on a villa. However, Articles 112, 112-2, 188, and 234-16 of the former Local Tax Act (amended by Act No. 732 of Jan. 5, 2005; hereinafter the same) provide for the imposition of acquisition tax, property tax, and aggregate land tax on a villa. Of them, the provisions on the definition of a villa are as follows.

【former Local Tax Act】

Article 12 (Tax Rates)

(1) The standard rate of acquisition tax shall be 20/1,000 of the value of acquired article or the amount of annual installments.

(2) Acquisition tax rates in acquiring real estate, etc. falling under any of the following subparagraphs (including cases of acquiring a portion of a villa, etc. by dividing it) shall be 500/100 of the tax rates listed in paragraph (1). In such cases, the same shall apply not only to cases where golf courses are registered (including cases where facilities are enlarged and changed; hereafter the same shall apply in this paragraph) but to cases where golf courses are used as de facto golf courses without registration, and where the boundary of land attached to any villa or high-class recreation center is unclear, land equivalent to ten times the floor area of the building shall be deemed land annexed thereto:

1. Villas: Residential buildings used for recreation, summering, amusement, etc. not used for permanent residence, and land annexed thereto (excluding houses in agricultural and fishing villages and land annexed thereto located in Eup or Myeon under Article 3 (3) and (4) of the Local Autonomy Act and meet the scope and standards prescribed by the Presidential Decree). In this case, the scope of and applicable standards for villas shall be determined by the Presidential Decree;

[Enforcement Decree of the former Local Tax Act (amended by Presidential Decree No. 18669 of Jan. 5, 2005)]

Article 84-3 (Standards for Applying Scope of Villas, etc.)

(1) "Agricultural and fishing village and land annexed thereto which meet the scope and standards prescribed by Presidential Decree" in the former part of Article 112 (2) 1 of the Act means agricultural and fishing village and land annexed thereto meeting the following requirements:

1. The lot area shall be not more than 660§³ and the total floor area of a building shall not exceed 150§³;

2. The statutory standard price of the building shall be within twenty five million won;

3. It shall not be located in any of the following areas:

(a) Gun areas and the metropolitan area under subparagraph 1 of Article 2 of the Seoul Metropolitan Area Readjustment Planning Act: Provided, That border areas under subparagraph 1 of Article 2 of the Border Area Support Act and those as determined by the Ordinance of the Ministry of Government Administration and Home Affairs among the nature preservation areas under the Seoul Metropolitan Area Readjustment Planning Act shall be excluded

(b) Urban areas and permitted areas under Articles 6 and 117 of the National Land Planning and Utilization Act;

(c) Areas designated by the Minister of Finance and Economy under Article 96 (1) 6-2 of the Income Tax Act; and

(d) Areas prescribed by the provisions of Article 99-4 (1) 1 (d) of the Restriction of Special Taxation Act.

(2) Article 104-3(1)6 of the Income Tax Act amended by Act No. 7837 of Dec. 31, 2005 stipulated a villa and its appurtenant land as one of the non-business land. The content is as follows.

Article 104-3 (Scope of Land for Non-business)

(1) The term "land for non-business use" in Articles 96 (2) 8 and 104 (1) 2-7 means land falling under any of the following subparagraphs (hereafter referred to as "land for non-business use" in this Article) during the period prescribed by Presidential Decree during which the relevant land is owned:

6. Residential buildings used not for permanent residence but for recreation, summering, amusement, etc. (hereafter in this subparagraph, referred to as the “ villa”) and land attached thereto: Provided, That rural and fishing villages and land attached thereto located in Eup or Myeon provided for in Article 3 (3) and (4) of the Local Autonomy Act and meet the scope and standards prescribed by the Presidential Decree shall be excluded, and when the boundary of land attached to a villa is unclear, land ten times the floor area of the building shall be deemed the land attached thereto;

(3) Articles 95(3) and 89 subparag. 3 of the former Income Tax Act, which had been enforced at the time of the transfer of the instant apartment, provide for non-taxation for income from the transfer of one house for one household as prescribed by the Presidential Decree. However, in the case of expensive houses whose transfer value exceeds the standard prescribed by the Presidential Decree, the method of calculating transfer margin was separately prescribed. However, in determining whether it constitutes a separate house in determining whether it constitutes a separate house, any provision was not provided for the following established rules.

[Reday 46014-1549, June 25, 1997]

- In determining one house for one household which is exempt from capital gains tax under the current Income Tax Act, the housing portion shall be determined according to the actual use at the time of transfer, and if the actual use is unclear, it shall be determined according to the content of registration on the public record.

- Buildings imposed as a villa under the provisions of the Local Tax Act are not deemed a house, or where they are used as a regular residence, they are deemed a house regardless of whether a local tax is levied.

(4) On the other hand, the Housing Act has the following definitions as to housing.

Article 2 (Definitions) The definitions of terms used in this Act shall be as follows:

1. The term "housing" means all or part of the building with the structure wherein the household members may carry on an independent residential life for a long time as well as the land attached thereto, and it shall be classified into detached housing and collective housing;

C. Facts of recognition

(1) The instant housing unit was newly built by Nonparty 1, his father, around July 14, 1976, as well as his subsidiaries, by the Plaintiff’s construction of a residential building. A subsidiary used as a warehouse is located in a place where the entrance door of the instant housing unit is not less than 20 meters, and one stable is located next thereto, and the entrance door of the relevant housing unit and the stable are facing each other. The remaining two housing units of the instant housing units are located a considerable distance from the housing unit. The housing units of the instant case consist of two rooms, living rooms, bathing rooms, boiler rooms, and boiler rooms.

(2) The instant forest land adjoins the packaging road, and the access road has been installed on the packaging road to the instant mountain site. At the entrance of the access road, the term “gold farm” was inscribed, and around that, the steel structure was installed, stating the phrase “Fran farm was installed,” stating that “I obtained miscellaneous land from Niju on November 15, 1974 with the benefit of Niju and left it alone, and endeavored to repair the relevant tree facilities for the future.” The land adjacent to the said forest land is used for cultivating crops, such as flowering, etc., and there is no special facility or amusement facility for recreation.

(3) After the construction of the instant housing zone, Nonparty 1 created a pond in the vicinity of the housing zone in question, tending a large number of ornamental trees and flowerss to the place where the said three livestock penss can be held concurrently for recreation by installing sperm at the forest and field. Meanwhile, Nonparty 1 employed a manager to raise the said three livestock pens, and let the crops grow in the forest and field, and even take a rest in the said three livestock farms, or directly carried out the work of raising the expenses and growing crops. However, since around the time of the death of Nonparty 1, Nonparty 1 was suspended and the livestock shed was not used. The Plaintiff did not actively make efforts to create a farm as Nonparty 1 while residing in the forest of this case, and the Plaintiff’s mother did not live in the said housing zone in Seoul and did not live in the housing zone in question. Nonparty 2, who is the Plaintiff’s mother, was living in the housing zone in question.

(4) From October 2003, Nonparty 3, who had been in charge of the management of the said “Stop farm,” was living in a vinyl house with a large amount of 50 meters away from the instant village house, and cultivated flowers and vegetables in the forest of this case. Nonparty 3 had three children. There are only one room and one main room in the residential house located in a vinyl house, and there are no toilets and three main rooms. Nonparty 3 used the bath for the instant village house when Nonparty 3 takes bath. Nonparty 3’s children did not have an Internet line in the apartment house of this case. Nonparty 3’s children were installed in the apartment house of this case, with the exception of the instant apartment house of this case, at the time of Nonparty 3’s apartment house of this case, Nonparty 3 installed a book and a computer connected to the Internet, and used it. The instant apartment house of this case was installed in the apartment house of this case with a large amount of 0 months from the point of 00 to the point of 20th of 20th of the instant apartment house of this case.

(5) At the time of the instant disposition, Nonparty 4, who worked as a driver at the company located in Incheon, was in charge of Nonparty 2's work at the time of the instant disposition. Nonparty 4, who was in charge of Nonparty 2's work at the time of the instant disposition. Nonparty 4, who was in charge of Nonparty 4's work at the time of the instant disposition, and, upon obtaining the Plaintiff's consent, did so on the land around the instant housing site, made food and drink in the housing site. Meanwhile, Nonparty 4, who was in charge of the instant housing site development project from May 10, 204 to October 18, 205, had been in charge of the instant housing site construction project at the time of the instant disposition. Nonparty 4, who was in charge of Nonparty 4's work at the time of the instant disposal of the housing site, had been in possession of the housing site at the time of the instant disposal site. However, it is difficult for the public official in charge of Nonparty 4's work at the time of the instant apartment site development project.

(6) The Plaintiff has not paid the acquisition tax, property tax and aggregate land tax corresponding to the villa for the instant dispute housing and forest land.

[Basis] Evidence Nos. 3 through 7, evidence Nos. 10, evidence Nos. 13-1, 2, evidence Nos. 14 through 22, evidence Nos. 3-1 through 9, evidence Nos. 10-1, 2, and 11-1, 11-2, each of the statements and images Nos. 10-1, 11-2, witness Non-Party 3, and Non-Party 5's testimony, the result of on-site inspection by the court of first instance, the purport of the whole pleadings

(d) Markets:

The term "house" under the Income Tax Act shall be determined by whether the actual purpose of use is a building actually provided for a residence. Even if a temporary use is made for a non-residential purpose, its structure, function, or facility is in a state suitable for a residence as its original residential purpose, and the residential function is maintained and managed as it is, and at any time, it shall be deemed as a house (see Supreme Court Decision 2004Du14960, Apr. 28, 2005). As seen above, the plaintiff or non-party 1 and non-party 2 did not reside in the house of this case, or created a pond in the vicinity of the house of this case after the non-party 1 constructed the house of this case, and thus, it is difficult to see that the apartment of this case was in a state of residence and the residential function of the house of this case at any time at the time of the transfer and management of the house of this case, and it is reasonable to see that the plaintiff's residential function or the house of this case was used as the house of this case.

However, since the income tax law provides for non-taxation for the transfer of one house for one household, and does not provide for whether it constitutes a separate house not used for regular residence in determining whether it constitutes a separate house. Thus, just because it constitutes a separate house under Article 112 (2) 1 of the former Local Tax Act, it cannot be said that it does not immediately constitute a house in determining whether it does not constitute a non-taxation for the transfer of one house for one household under the Income Tax Act. However, in this case, the defendant does not clearly dispute the fact that it does not constitute a house for one household, and as seen earlier, it does not constitute a house for 3rd house under the Local Tax Act which is not a house for 4th house in the determination of whether it is a house for 15th house in the judgment of the court of first instance as to whether it is a house for 14th house in the judgment of the court below as to whether it is a house for 15th house in the judgment of the court below as to whether it is a house for 3rd house in the judgment of 19th house.

Therefore, Article 112 (2) 1 of the former Local Tax Act provides that "A building used as a residential building for recreation, summering, amusement, etc. and not for permanent residence, and its appurtenant land (excluding a house in an agricultural and fishing village and its appurtenant land)" as its separate site. In order for a building to fall under a villa to fall under the villa building here, it shall be sufficient if it is used for villa depending on the actual condition of the building (see Supreme Court Decision 94Nu8280, 8297, Nov. 11, 1994, etc.). Since Nonparty 1, his father of the Plaintiff constructed a village house in this case, he constructed a village house in the vicinity of the village housing, and created a village village around the village housing, and even if it was difficult to view that Nonparty 2 had no residential housing in this case, such as the Plaintiff’s residential housing, at the same time, it was a place where it was possible to see that Nonparty 1 had no residential housing in this case, and that Nonparty 1 had no residential housing in this case.

On the other hand, it is not necessarily necessary to determine whether a residential building is used as a villa for non-residential purposes, and it is also a lessee of the building (see Supreme Court Decision 87Nu932, Apr. 12, 198; Supreme Court Decision 97Nu4364, May 30, 197, etc.). As seen above, Nonparty 3, a farm manager at the time of the transfer of the apartment house of this case, used part of the disputed house, such as using a bath room for the instant village house with the Plaintiff’s consent, and his children used part of the housing for the purpose of public study or using the Internet. However, it is difficult to view that Nonparty 3, who was in charge of the management of the said “gold farm” on behalf of the Plaintiff, used only part of the housing for non-party 3’s house in the process of managing the said house, including the instant housing for non-party 400, Apr. 20, 200.

Therefore, in full view of the aforementioned circumstances, since the instant apartment house at the time of the transfer of the apartment at issue constitutes a villa, not a house ordinarily used, and thus, the Defendant’s disposition that reported that the transfer of the instant apartment does not constitute a transfer of one house for one household is unlawful.

3. Conclusion

Therefore, the plaintiff's claim of this case shall be accepted on the grounds of its reasoning, and since the judgment of the court of first instance is unfair on the grounds of its conclusion, the plaintiff's appeal shall be accepted, and it shall be revoked, and it shall be so decided as per Disposition.

Judges Park Jong-dae (Presiding Judge)