Cho High Court Decision 2009Du3554 (No. 21, 2010)

Where a person owns a house and an association member's relocation right, whether the person has a special case of non-taxation for one household

Since one house and one association's occupancy right are owned, the special case of non-taxation of capital gains tax may not be applied to the transfer of one house (after December 31, 2005).

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

2. The plaintiff shall bear the litigation costs.

The defendant's refusal to correct the transfer income tax of 43,169,570 won against the plaintiff on June 5, 2009 shall be revoked.

1. Circumstances of the disposition;

A. On November 11, 1993, the Plaintiff purchased ○○○○○○-dong 1050-2302 (hereinafter “instant house”) and acquired it. Around that time, the Plaintiff resided with his family members from around to November 2008.

B. On September 30, 2003, the Plaintiff’s husband A fully purchased and acquired the second floor of 128 Do 126 Do △△△-dong Housing (hereinafter “house prior to reconstruction”). After that, the reconstruction project of the said △△-dong Housing Complex was implemented on April 7, 2006, the authorization for the implementation of the project was publicly notified on or around April 7, 2006, and the management and disposal plan was authorized pursuant to the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter “Do Do -”), and the AA fully acquired the status of being selected as the occupant of the said apartment (hereinafter “the instant association member’s relocation right”).

C. The Plaintiff transferred the instant house to BB on November 28, 2008 in KRW 229,00,000, and calculated the capital gains tax amount as KRW 43,169,570 on January 30, 2009 and paid it voluntarily to the Defendant after filing a preliminary return on the tax base of capital gains.

D. After that, on April 7, 2009, the Plaintiff asserted that the transfer of the instant house to the Defendant, and that the transfer of the instant house is subject to the proviso of Article 89(2) of the Income Tax Act (amended by Act No. 9897, Dec. 31, 2009; hereinafter referred to as the “former Income Tax Act”) and Article 156-2(4) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 21215, Dec. 31, 2008; hereinafter referred to as the “former Enforcement Decree of the Income Tax Act”) delegated by the Plaintiff, the Plaintiff claimed that the special case of capital gains tax exemption for one house per one household shall be subject to the application of the said special case of capital gains tax exemption, and filed a claim for correction to the effect that the said transfer income

E. On June 5, 2009, the Defendant rendered the instant disposition rejecting the claim for correction on the ground that when one household owns two houses as in the instant case and one house is converted into one association member's relocation right, when one household transfers the relevant house under the possession of one house and one association member's relocation right, such association member's relocation right shall be regarded as a house pursuant to the main sentence of Article 89 (2) of the former Income Tax Act, and the special case of non-taxation of one house for one household under the proviso of Article 89 (2) of the former Income Tax Act and Article 156-2 (4) of the former Enforcement Decree of the Income Tax Act is not applicable.

[Grounds for recognition] The items of evidence Nos. 2 and 3-1, 2, and 5-7, and the purport of the whole pleadings

2. Whether the disposition is lawful;

(a)the master of the plaintiff;

The "one house for one household possessing one house in Korea" under Article 156-2 (4) of the Enforcement Decree of the Income Tax Act shall not be included in the "one house subject to reconstruction before the approval plan for the management and disposal plan". Thus, when the plaintiff or the plaintiff or the plaintiff spouse who constitutes one household owns two houses, such as the house and the house subject to reconstruction, before re-building, while the plaintiff or the plaintiff's spouse possessed two houses, such as the house, before re-building, etc. according to the approval plan for the management and disposal plan on October 23, 2006, when the house transferred to the association member's relocation right, becomes possessed one house and one association member's relocation right by acquiring one house and one association member's relocation right temporarily before transferring the house, it constitutes "the case where one household possessing one house in Korea comes to possess one house and one association member's relocation right temporarily before transferring the house" under Article 156-2 (4) of the Enforcement Decree of the Income Tax Act, and the defendant's disposal of the house in this case should be applied differently under Article 156 (2) of the former Enforcement Decree.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

(1) According to the main text of Article 89(2) of the Income Tax Act newly established upon the amendment by Act No. 7837 of Dec. 31, 2005, where one household possesses a house (including land annexed to a house; hereafter the same shall apply in this Article) and an association member's relocation right acquired upon the approval of a management and disposal plan under the Do Government Act, and transfers the house, the special case of non-taxation for one household under paragraph (1) of the same Article does not apply to the case where the house is transferred. Under Article 12(1) of the Addenda of the Income Tax Act, the amended provisions of Article 89(2) of the same Act are applied from the portion for which the management and disposal plan for the house redevelopment project or the house reconstruction project under the Do Government Act was approved for the first time after January 1, 2006. Thus, if one household possesses an association member's relocation right under the Do Government Act and transfers the house, it cannot be subject to the said special case under paragraph (1) of the 20) of the former Act.

However, the Income Tax Act regulates special cases of non-taxation for one household in cases where one household possesses one house and one association member's relocation right for the purpose of real estate speculation through mediating the association member's relocation right as above, and exceptionally intends to exempt the transfer income tax for one house and one association member's relocation right for the purpose of actual use. In other words, the proviso of Article 89 (2) of the former Income Tax Act provides that "the same shall not apply to cases where one household acquires a house for residence during the period of implementation of a housing reconstruction project or a housing redevelopment project under the Do Government Act or for other unavoidable reasons, and Article 156-2 (4) of the former Enforcement Decree of the Income Tax Act, one of the delegated provisions, provides that "where one household possesses one house and one association member's relocation right temporarily becomes to possess one house and one association member's relocation right temporarily by acquiring the association member's relocation right before transferring the house, and where the previous house is transferred after two years from the date of acquisition and meeting all the requirements of the following subparagraphs, it shall be regarded as one house for one household:

When one household possesses one house and one association member's relocation right, in light of the above legislative intent of prescribing the special exception for non-taxation of one house for one household and the contents of Article 156-2 (4) of the former Enforcement Decree of the Income Tax Act, etc., "where one household possessing one house temporarily comes to possess one house and one association member's relocation right as it acquires one house and one association member's relocation right before transferring the house" means the case where one household possesses one house and one association member's relocation right for the purpose of using one house for the purpose of end of house reconstruction and redevelopment under the Do Government Act while one household possesses only one house.

(2) Therefore, the transfer of this case's house is subject to the special taxation under Article 156-2 (4) of the former Enforcement Decree of the Income Tax Act.

According to the above, when one household, such as the plaintiff couple, owns two houses, such as the house in this case and the house before reconstruction, and among them, the house before reconstruction was converted into the management and disposal plan for the reconstruction project under the Do Government Act after January 1, 2006, and the plaintiff transferred the house in this case after two years have elapsed from the date. However, as in this case, if one household owns two houses, as in this case, one house and one association member's member's member's member's member's member's member's member's member's member's member's member's member's member's member's member's right is converted into the management and disposal plan for the house in this Do Government under the Do Government Act, one house and one association member's member's member's member's member's member's member's member's member's member's member's member's member's right is not applied to the reconstruction project under the main sentence of Article 28 (2) of the former Enforcement Decree.

Therefore, it is reasonable that the defendant made a disposition of different cases for the same reasons as the defendant's family.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.