In order to become an object of non-taxation of transfer income tax by falling under “one house for one household”, whether there is no fact of acquiring another house after the acquisition date of the house concerned, or whether there is no fact of owning another house for at least five years with the house concerned (negative)

In order to constitute “one house for one household” as stipulated in Article 15(1)2 of the Enforcement Decree of the Income Tax Act, which is a transferred house, it is sufficient that the household that constitutes the transferor at the time of transfer owns in Korea for not less than five years, and it is not necessary to have all the fact of acquiring another house after the acquisition date of the relevant house, or to have not owned another house for not less than five years for which the transferor owns the relevant house.

Article 5 subparagraph 6 (i) of the Income Tax Act, Article 15 (1) 2 of the Enforcement Decree of the same Act.

Supreme Court en banc Decision 83Nu446 delivered on March 27, 1984 (Gong1984,734) 87Nu526 delivered on October 13, 1987 (Gong1987,173) 92Nu1298 delivered on January 19, 1993 (Gong193,763)

[Judgment of the court below]

Head of Yongsan Tax Office

Seoul High Court Decision 92Gu19530 delivered on December 24, 1992

The judgment below is reversed and the case is remanded to Seoul High Court.

As to the Plaintiff’s ground of appeal

In light of the provisions of subparagraph 6 (i) of Article 5 of the Income Tax Act, Article 15 (1) of the Enforcement Decree of the same Act, and Article 6 (3) of the Enforcement Decree of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1875 of Feb. 2992), the court below held that, even if the transferor of the apartment house owned the apartment house on Jan. 16, 1992, the plaintiff constitutes one household by marriage with the non-party on Apr. 30, 1985, the non-party acquired 105 of the first apartment floor from the Housing Association of Yeongdeungpo-gu, Seoul ( Address omitted) from Apr. 30, 1986, but transferred it on Apr. 27, 1990, the non-party acquired the apartment house of this case from the non-party under Article 5 (6) (i) of the Income Tax Act, and Article 6 (3) of the Enforcement Decree of the same Act (amended by Ordinance of the Ministry of Finance and Economy No. 1875 of Feb. 29, 19, 19992).

However, in order to apply the "one house for one household" as stipulated in Article 15 (1) 2 of the Enforcement Decree of the above Act to the "one house for one household" which is a transferred house, it is sufficient that the household comprised of the transferor at the time of transfer is not less than five years and it is sufficient that there is no all of the fact that the transferor acquired another house after the acquisition date of the pertinent house, or that there is no other house for five years with the corresponding house (see Supreme Court Decision 92Nu12988 delivered on January 19, 193).

According to the facts found by the court below, since the plaintiff's holding period of the apartment of this case is clear in fact for more than five years, if the above apartment was the only house owned by the household that constituted the plaintiff in Korea at the time of its transfer, the income accrued from the transfer of the above apartment shall be deemed to meet the non-taxation requirement under Article 15 (1) 2 of the Enforcement Decree of the Income Tax Act.

Ultimately, the judgment of the court below that the disposition of this case is lawful on the ground that the non-party, the wife of the plaintiff who constituted one household between the plaintiff and the transfer of the apartment house in this case, owns another house, does not constitute a non-taxation requirement under the Enforcement Decree of the Income Tax Act. Thus, the judgment of the court below that the disposition of this case was lawful, by misunderstanding the legal principles as to the non-taxation requirement of the first house for one household

It is so decided as per Disposition by the assent of all participating Justices on the bench that the judgment of the court below is reversed and the case is remanded to the court below.

Justices Yoon Young-young (Presiding Justice)