Whether it constitutes a newly-built house eligible for the application of the transfer tax reduction or exemption

In a case where a partnership, etc. received a down payment by directly concluding a sales contract for the remaining house within the newly-built house acquisition period with a person other than its members, the transfer tax reduction or exemption may apply to a member's house acquired with approval for use after the new house acquisition period

Transfer income tax on the acquisitor of Newly-built houses under Article 99-3 of the Restriction of Special Taxation Act

1. The defendant's disposition rejecting an application for rectification regarding KRW 135,789,620 of the transfer income tax belonging to the year 2004 against the plaintiff on July 18, 2005 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. The plaintiff owned ○○○○-dong ○○-dong ○○-dong ○○-dong ○○-dong ○○ apartment ○○-dong ○○○ apartment ○○-dong ○○ apartment ○-dong ○○ apartment ○○ apartment ○○ ○○ ○○ dong dong hereinafter "the association of this case"). When the reconstruction project was implemented, the association of this case was invested in the association of ○○ ○ ○ apartment ○ ○ ○ ○○ dong ○ ○○ dong ○ ○ ○ dong ○ ○ ○ ○ ○ dong ○ ○ ○ ○ ○ ○ dong ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ 2000, Nov. 24, 2000.

B. On November 12, 2004, the Plaintiff transferred the instant apartment in question to KRW 950,000,000, and filed a final return on the capital gains tax base on May 27, 2005, and paid KRW 135,789,620.

C. The plaintiff received a provisional approval on October 31, 2003 after the expiration of the new house acquisition period from May 23, 2001 to June 30, 2003 under Article 99-3 (1) 1 of the former Restriction of Special Taxation Act (amended by Act No. 6762 of Dec. 11, 2002; hereinafter the same) the apartment house at issue, which the plaintiff acquired as a member of the association of this case, as a member of the association of this case, was subject to a provisional approval on the new house acquisition period from May 23, 2001 to June 30, 2003. However, even if the association of this case received a provisional approval on the temporary house acquisition period, the remaining apartment after supplying to the members of the association of this case from November 27, 2002 to November 29, 2002, the issue of this case constitutes a refund claim for correction from a housing developer seeking the full reduction of capital gains tax from the whole apartment house.

D. On this premise, the Defendant rejected the Plaintiff’s request for correction on July 18, 2005, on the ground that the instant apartment does not constitute a special taxation for capital gains tax under Article 99-3(1) of the former Restriction of Special Taxation Act, even if the general allotment of the instant apartment was concluded and the down payment was made within the newly-built house acquisition period, on the premise that the instant apartment constitutes a newly-built house built house under Article 99-3(1)2 of the former Restriction of Special Taxation Act.

[Ground of recognition] Unsatisfy, entry of Gap1 to 6 evidence

2. Whether the disposition is lawful;

A. The plaintiff's assertion

Article 99-3 (1) 1 of the Restriction of Special Taxation Act and Article 99-3 (3) 2 of the former Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 18044, Jun. 30, 2003; hereinafter the same) provide that capital gains tax shall be fully reduced or exempted on any income accruing from transfer of a house within five years from its acquisition date, where a housing association under the Housing Construction Promotion Act or an redevelopment cooperative under the Urban Redevelopment Act (hereinafter referred to as the “housing Association, etc.”) acquires a house from a housing association, etc. (including approval for temporary use) after the expiration of the new acquisition date, even if the housing association, etc. has obtained approval for use after the new acquisition date (including approval for temporary use). Thus, the issue of this case is that capital gains tax should be imposed on any income accruing from transfer of the house from a housing association under the Housing Construction Promotion Act or an urban redevelopment cooperative under the Urban Redevelopment Act (hereinafter referred to as the “Housing Association, etc.”).

(b) Related statutes;

○ Special taxation for transfer income tax on a person acquiring newly-built house under Article 99-3 of the Restriction of Special Taxation Act

(1) With respect to the income accruing from transfer of a newly-built house (including land attached to a house, the total floor area of which is less than twice the total floor area of the relevant building; hereafter the same shall apply in this Article) falling under any of the following subparagraphs by a resident (excluding a housing construction business operator) within five years from the date of acquisition, the tax amount equivalent to 100/100 of the transfer income tax shall be reduced or exempted, and where the relevant newly-built house is transferred after five years have elapsed from the date of acquisition thereof, the transfer income accruing for five years from the date of acquisition thereof shall be subtracted from the income amount subject to the transfer income tax: Provided, That this shall not apply where the relevant newly-built house falls under the declass house that is excluded from the object of non-taxation of transfer income tax under subparagraph 3

1. In cases of newly-built house acquired from a housing developer:

A newly-built house acquired by a person who first concludes a sales contract and pays a down payment with a housing constructor during the period from May 23, 2001 to June 30, 2003 (hereafter in this Article, referred to as the “newly-built house”) (including such a house as prescribed by the Presidential Decree, which is acquired through a housing association under the Housing Construction Promotion Act or an redevelopment association under the Urban Redevelopment Act): Provided, That a house that has been occupied by another person as of the date of a sales contract,

2. Cases of newly-built house (including a house acquired by a housing association under the Housing Construction Promotion Act or an association member under the Urban Redevelopment Act) constructed by himself; and

A newly-built house that has obtained approval or inspection for use (including approval for temporary use) within the newly-built house acquisition period

○ Annex to the Restriction of Special Taxation Act (Law No. 6762 of December 11, 2002)

Article 1 (Enforcement Date) This Act shall enter into force on and after January 1, 2003.

Article 2 (General Application Examples)

(2) The amended provisions of this Act concerning capital gains tax shall apply to the first transfer after the enforcement of this Act.

Article 29 (Transition Measures for Special Taxation of Transfer Income Tax on Purchasers of Newly-Built Houses)

(1) In case where a newly-built house, which was newly built by a housing constructor, entered into a first sales contract other than a housing constructor in accordance with the previous provisions of Article 99 (1) or 99-3 (1) before this Act enters into force, is transferred after this Act enters into force, the previous provisions shall apply to the calculation of the amount subject to abatement or exemption of transfer income tax and that of the amount subject to taxation of transfer income tax, notwithstanding the amended provisions of Article 99 (1) or 99-3 (1). In this case, the declass standard of a newly-built house as of the date when a sales contract

(2) Where a newly-built house under Article 99-3 (1) 2 commences its construction work for the relevant newly-built house before this Act enters into force, and has obtained the approval for use or inspection for use (including approval for temporary use) before June 30, 2003, the previous provisions shall, notwithstanding the amended provisions of Article 99-3 (1), be applied.

○ Special taxation for transfer income tax on the acquisitor of a newly-built house under Article 99-3 of the Enforcement Decree of the Restriction of

(3) The term “houses prescribed by the Presidential Decree” in Article 99-3 (1) 1 of the Act means the houses falling under any of the following subparagraphs (amended by the Presidential Decree No. 18044, Jun. 30, 2003):

1. A house remaining after a housing association under the Housing Construction Promotion Act or an redevelopment cooperative under the Urban Redevelopment Act (hereafter in this Article, referred to as the “housing association, etc.”) supplies to its members (hereafter in this Article, referred to as the “ residual house”) and which is acquired by a person who concludes a direct sales contract and pays the down payment with a housing association, etc. within the new house acquisition period under Article 9-3 (1) 1 of the Act (hereafter in this

2. A house acquired by a member (referring to a member as of the date of authorization of a management and disposal plan under Article 34 of the Urban Redevelopment Act, or the date of approval of a business plan under Article 33 of the Housing Construction Promotion Act; hereafter in this subparagraph, the same shall apply) from a housing association, etc., for which an approval for use or inspection for use is obtained at the expiration of the new house acquisition period: Provided, That it shall be limited to cases where a housing association, etc. has received the down payment by directly concluding a sales contract for the remaining

○ Article 89 of the Income Tax Act

No income tax on transfer income (hereinafter referred to as “transfer income tax”) shall be levied on the following incomes (amended by Act No. 6781 of December 18, 2002):

3. Income accruing from a transfer of one house for one household prescribed by Presidential Decree (excluding high-class houses, the total floor area, value, facilities, etc. of which exceed the standards prescribed by Presidential Decree of residential buildings) and the appurtenant land within the area calculated by multiplying the area of land on which the building is built by the ratio prescribed by Presidential Decree by

○ Scope of high-class houses under Article 156 of the Enforcement Decree of the Income Tax Act

For the purpose of subparagraph 3 of Article 89 of the Act, the term "high-class house, the total floor area, value, and facilities of which exceed the standards prescribed by Presidential Decree" means a house falling under any of the following subparagraphs and the land annexed thereto (amended by Presidential Decree No. 17825, Dec. 30, 2002):

2. An apartment house (including a multi-family house, but excluding the case deemed to be a detached house under the provisions of Article 155 (15)) whose exclusive area (including the area of underground parts used for exclusive residence) is not less than 149 square meters and whose actual transaction price at the time of transfer exceeds 600

C. Determination

Article 99-3 (1) of the former Restriction of Special Taxation Act provides that the tax amount equivalent to 100/100 of transfer income tax shall be reduced or exempted for the income accruing from the transfer of a newly-built house falling under any of the following subparagraphs by a resident within five years from the date of its acquisition: Provided, That this shall not apply to the case where the newly-built house concerned constitutes a de facto house excluded from the object of non-taxation of transfer income tax under subparagraph 3 of Article 89 of the Income Tax Act. Article 99-3 (3) of the former Enforcement Decree of the Restriction of Special Taxation Act provides that a newly-built house (including a house acquired through a housing association, etc.) acquired by entering into a sales contract with a housing association for the first time during the newly-built house acquisition period and paying the down payment under subparagraph 1 and Article 99-3 (3) of the former Enforcement Decree of the Restriction of Special Taxation Act provides that the remaining house is acquired by a member of the housing association, etc. under subparagraph 2, and the newly-built apartment house becomes subject to 9.

In addition, Article 99-3 (1) of the former Restriction of Special Taxation Act was amended by Act No. 6762 of Dec. 11, 2002, but Article 29 (1) of the Addenda of the amended Act is a transitional measure. Where a newly-built house that first concludes a sales contract with a housing constructor and has paid a down payment is transferred after the enforcement of this Act, the previous provisions shall apply to the calculation of income subject to reduction and exemption of transfer income tax and transfer income tax, notwithstanding the provisions of the amended Act. In this case, the high-class housing standards as of the date of payment of down payment shall apply, and Article 89 subparagraph 3 of the former Income Tax Act (amended by Act No. 6781 of Dec. 18, 2002; hereinafter the same shall apply) provides for the criteria for exclusion from high-class houses subject to non-taxation of transfer income tax pursuant to the delegation of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 15657, Dec. 30, 2002). 201.

3. Conclusion

If so, the plaintiff's claim is reasonable.