Whether "Housing" subject to reduction of the amount of tax for acquisition tax and registration tax pursuant to Article 273-2 of the former Local Tax Act includes a dormitory under the Building Act (negative)

Article 273-2 of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) provides that a “house” subject to reduction of the amount of tax for acquisition tax and registration tax pursuant to Article 273-2 of the former Local Tax Act is distinct from a “building” under Article 104 subparagraph 4 of the former Local Tax Act, and the dormitory under the Building Act shall not be included in that “house.”

Article 104 Subparag. 4 (see current Article 6 Subparag. 4), Article 180 Subparag. 3 (see current Article 104 Subparag. 3), Article 273-2 (see current Article 40-2) of the former Local Tax Act (wholly amended by Act No. 1021, Mar. 31, 2010); Article 2(1)2, Article 2-2 (see current Article 2(1)3), and (2) of the former Building Act (wholly amended by Act No. 8974, Oct. 26, 2006); Article 3-4 [Attachment 1] of the former Enforcement Decree of the Housing Act (Amended by Presidential Decree No. 19714, Feb. 3, 2009); Article 2(1)2, and 2-2 (see current Article 2(1)3); Article 2-4 of the former Enforcement Decree of the Housing Act (Amended by Act No. 19714, Oct. 26, 2006)

The administrator of the non-party in charge of the non-party in the management of the rehabilitation debtor chid Construction Co., Ltd. (Law Firm Gyeongsung, Attorneys Kim Tae-tae et al., Counsel for the plaintiff-appellant)

Head of Changwon-si (Government Law Firm Corporation, Attorneys Kim Jae-gu et al., Counsel for the plaintiff-appellant)

Busan High Court (Chowon) Decision 2012Nu1849 decided May 2, 2013

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

The grounds of appeal are examined.

1. A. Article 273-2 of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) provides that “The acquisition tax on a house acquired or registered as a result of floating transactions shall be reduced by 50/100 of the tax amount calculated by applying the tax rate under the provisions of Article 112(1), and the registration tax shall be reduced by 50/100 of the tax amount calculated by applying the tax rate under the provisions of Article 131(1)3(2)” (hereinafter “the provisions of this case”), and thus, the subject of reduction is “house”.

B. Article 104 of the former Local Tax Act defines terms used in acquisition tax as “building” in subparagraph 4 includes “building pursuant to the provisions of Article 2(1)2 of the Building Act”. Articles 2(1)2, 2-2, and 2(2) of the former Building Act (wholly amended by Act No. 8974, Mar. 21, 2008; hereinafter the same) and Article 3-4 [Attachment 1] of the former Enforcement Decree of the Building Act (amended by Presidential Decree No. 19714, Oct. 26, 2006; hereinafter the same shall apply) by defining the term “building” in subparagraph 4 as “building”. Article 2 subparag. 2 of the same Act provides that a building shall be used for students, employees, etc. of a school, a factory, etc., and shall have a structure of joint cooking, etc., but shall have an independent residential structure, but shall have an independent type of dormitory under the Building Act.”

Meanwhile, Article 180 of the former Local Tax Act defines the term used in property tax as "housing pursuant to Article 2 subparagraph 1 of the Housing Act," and Article 2 subparagraph 1 and subparagraph 2 of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009; hereinafter the same) and Article 2 (1) of the Enforcement Decree of the Housing Act by delegation thereof provides that "the types and scope of multi-family housing shall be governed by the provisions of subparagraph 2 (a) through (c) of the attached Table 1 of the Enforcement Decree of the Building Act." As to property tax, dormitories under the Building Act excludes the scope of "housing".

As such, Article 104 Subparag. 4 of the former Local Tax Act provides that dormitories under the Building Act fall under “building” which is subject to acquisition tax, and does not define “housing” with respect to acquisition tax and registration tax, and the concept of “housing” as provided in property tax does not coincide with the above “building”, the scope of buildings included in “housing” should be interpreted differently in accordance with the purpose and purpose of each provision in cases where the term “housing” is used, not “building” under the individual provisions of the former Local Tax Act concerning acquisition tax and registration tax.

C. The purpose and purpose of introducing the legal provisions of this case are to alleviate the sudden increase in tax burden of taxpayers following the rise in the tax base of acquisition tax and registration tax, such as the individual housing price and apartment housing price under the Act on Public Notice of Values and Appraisal of Real Estate due to the reorganization of real estate tax in 2005, which have become the current base of the housing price.

However, dormitories under the Building Act do not include multi-family housing, the price of which is publicly notified under the Public Notice of Values and Appraisal of Real Estate Act, and is used for students, employees, etc. of schools, factories, etc., and thus is ordinarily not frequently traded. Accordingly, Article 2 subparag. 3 of the Restriction of Special Local Taxation Act, which was enacted on March 31, 2010, provides that “multi-family housing means multi-family housing as defined in Article 2 subparag. 2 of the Housing Act, and a dormitory is excluded.”

D. In full view of the contents of the relevant provisions such as the former Local Tax Act and the legislative purpose of the instant provisions, “housing” subject to the reduction of the amount of acquisition tax and registration tax pursuant to the instant provisions is distinct from “building” under Article 104 subparag. 4 of the former Local Tax Act, and the dormitory under the Building Act is not included in “housing”.

2. According to the reasoning of the judgment of the first instance as cited by the court below, the plaintiff purchased a dormitory of the first floor and the fifth floor above the ground, which was used as a dormitory for employees from the Omat Elevators Limited Company (hereinafter “the dormitory of this case”) on September 22, 2006. Each floor of the dormitory of this case is composed of toilets, shower rooms, and laundry rooms for each separate entrance.

Examining these facts in light of the legal principles as seen earlier, the dormitory of this case constitutes a dormitory under the Building Act because it was used for the employees of a factory, etc., and it did not have an independent residential form, and thus, it does not constitute a “house” under the provisions of the Act.

Nevertheless, the lower court, on the erroneous premise that the “house” under the provision of this case’s law means a residential building, such as a detached house or an apartment house, under the premise that the use of the “house” under the Building Act itself means a residential building, such as a detached house or an apartment house, determined that the dormitory of this case is included in the “house” under the provision of this case’s law, and that the instant disposition, which excluded the application of the provision of this case

Therefore, the lower court erred by misapprehending the legal doctrine on the scope of “house” as stipulated in the instant legal provision, thereby adversely affecting the conclusion of the judgment. The ground of appeal assigning this error is with merit.

3. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)