Whether a cooperative house approved for use after the expiration of the new house acquisition period is eligible for reduction or exemption.

If a redevelopment association sells to its members first and sells a remaining house to those other than its members within the newly-built house acquisition period, all of its members and non-members are subject to reduction of 10% of capital gains tax if they have obtained approval for use or inspection after the new house acquisition period

Article 99 of the Restriction of Special Taxation Act (Abatement or Exemption of Transfer Income Tax for Purchasers of Newly-Built Houses)

1. The defendant's disposition rejecting correction of KRW 52,471,840 for the transfer income tax belonging to the year 2003 against the plaintiff on April 10, 2006 shall be revoked.

2. The costs of lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. The ○○ Housing Redevelopment Partnership was established for the purpose of implementing a housing redevelopment project to build apartment houses of 2621 households on the ○○○○-dong ○○○-dong, ○○-1, and 430 parcels on the ground, and was subject to an administrative disposition plan from the competent authority.

B. On February 28, 2000, the Plaintiff entered into an apartment sale plan with the above redevelopment cooperative and ○○○○○-dong ○○○○○ apartment unit ○○○○○-dong (hereinafter “instant apartment”).

C. Meanwhile, on the other hand, on November 21, 1998, the redevelopment cooperative received an application from the ○○-gu to invite occupants to the general supply household of 891 households remaining after supplying them with the approval of the invitation of occupants. On December 2, 1998, the redevelopment cooperative received an application from applicants with certain qualifications, such as subscription deposit, and received a decision on the successful bidder around that time, and received a sales contract and a down payment.

D. On December 26, 2000, the above redevelopment partnership obtained a completion authorization for the above redevelopment project from ○○-gu.

E. On November 25, 2003, the Plaintiff transferred the instant apartment to Kim○-○ to KRW 419,00,000,000, and on January 30, 2004, the Plaintiff paid KRW 52,471,840 of transfer income tax when filing a preliminary return on the transfer of the instant apartment to the Defendant on January 30, 204.

F. After that, on April 4, 2006, the Plaintiff filed an application for correction that the transfer of the apartment of this case was the tax amount equivalent to 100/100 of the transfer income tax pursuant to Article 99 of the former Restriction of Special Taxation Act (amended by Act No. 6762 of Dec. 11, 2002; hereinafter referred to as the “former Act”), and filed an application for correction, claiming that the tax amount initially returned and paid is the tax amount subject to reduction

G. Accordingly, the Defendant rendered the instant disposition rejecting the Plaintiff’s application for correction on April 10, 2006, on the ground that the Plaintiff acquired the instant apartment as a member of the Housing Redevelopment Association, not the Plaintiff’s acquisition from the housing construction proprietor, and that the instant apartment was approved for completion on December 26, 2000 after the new house acquisition period (from May 22, 1998 to June 30, 199) elapsed, and thus, it did not constitute the subject of special taxation for capital gains tax under Article 99 of the former Act.

2. Whether the disposition is lawful;

If a member of the redevelopment association acquires a house through the redevelopment association because the house constitutes a newly-built house built by himself, and if the house is transferred, the member may be exempted from capital gains tax pursuant to Article 99(1)2 of the former Act only if he has obtained approval for use or inspection for use from May 22, 1998 to June 30, 199. In the case of a newly-built house acquired from a housing developer, if he first concludes a sales contract and pays a down payment within the newly-built house acquisition period pursuant to Article 99(1)1 of the former Act, the capital gains tax may be reduced or exempted even if he has obtained the approval for use or inspection after the newly-built house acquisition

However, Article 99 (1) 1 of the former Act provides that a house acquired through a redevelopment association and prescribed by the Presidential Decree constitutes a newly-built house under Article 99 (1) 1 of the former Act. Article 99 (3) 2 of the former Enforcement Decree setting the scope of the above house provides that if a redevelopment association directly concludes a sales contract for the remaining house remaining after the redevelopment association sold it to its members and received down payment within the newly-built house period with a person other than its members, it constitutes a house acquired by a redevelopment association under the Urban Redevelopment Act under Article 99 (1) 1 of the former Act, which has been approved for use or inspection after the expiration of the acquisition period of the newly-built house. Thus, if a redevelopment association has concluded a sales contract and received down payment with a person other than its members within the newly-built house acquisition period, the house acquired by the redevelopment association becomes a newly-built house under Article 99 (1) 1 of the former Act and becomes a newly-built house acquisition association's remaining house after the expiration of the newly-built house acquisition period or use inspection from its members.

According to the above facts, the above redevelopment cooperative is a redevelopment cooperative under the Urban Redevelopment Act, and the plaintiff acquired a newly-built house through the redevelopment cooperative as a member of the redevelopment cooperative, and the above redevelopment cooperative has concluded a sales contract with a person other than the union members for the remaining house remaining after selling it to the union members within the newly-built house acquisition period and received the down payment. Thus, even if the above house has undergone a completion inspection on December 26, 2000 after the newly-built house acquisition period, it constitutes a newly-built house under Article 99 (1) 1 of the former Enforcement Decree under Article 99 (3) 2 of the former Enforcement Decree, so long as the plaintiff transferred the apartment house of this case within five years from the date of its acquisition, the entire amount of capital gains tax shall be reduced or exempted pursuant to the main sentence of Article 99

In light of the fact that Article 99 (3) 2 of the former Enforcement Decree provides that a newly-built house acquired from a housing developer shall be interpreted within the scope of delegation, and therefore, it shall be interpreted within the scope of delegation. However, the defendant argues that a house under the above provision shall be limited to a house acquired by a member from a housing association, etc. as a general buyer. However, barring special circumstances, the interpretation of tax law should be interpreted in accordance with the legal text, and the interpretation of tax law shall not be permitted as it violates the principle of no taxation without law, and it shall not be permitted to expand or analogically interpret it without reasonable grounds. Thus, the defendant's above argument is without merit.

Therefore, the defendant's disposition of this case which imposed capital gains tax on the ground that the plaintiff is not subject to reduction or exemption under Article 99 (1) of the former Act is unlawful.

3. Conclusion

If so, the plaintiff's claim shall be accepted for the reasons of the judgment as per Disposition.

4. Relevant statutes

(1) With respect to the income accruing from the transfer of a newly-built house (including the land less than twice the total floor area of the relevant building; hereafter in this Article the same shall apply) falling under any of the following subparagraphs by a resident (excluding a housing construction business operator) who has acquired a newly-built house under Article 99 of the Restriction of Special Taxation Act (amended by Act No. 6762 of Dec. 11, 2002), within 5 years from the date of its acquisition, the tax amount equivalent to 100/100 of transfer income tax shall be reduced or exempted, and where the relevant newly-built house is transferred after the lapse of 5 years from the date of its acquisition, the transfer income amount accruing for 5 years from the date of its acquisition shall be subtracted from his income amount subject to the transfer income tax: Provided, That this shall not apply to the case where the newly-built house falls under the deluxe house that is excluded from the object of

1. A house which is constructed by himself (including any house acquired by a member of a housing association under the Housing Construction Promotion Act, or an redevelopment cooperative under the Urban Redevelopment Act) and for which the approval for use or inspection for use (including the approval for temporary use) has been obtained during the period from May 22, 1998 to June 30, 199 (it shall be from May 22, 1998 to December 31, 199 in the case of national housing; hereafter in this Article, referred to as the “new house acquisition period”); and

2. A house acquired from a housing developer by a person who first concludes a sales contract and pays a down payment within the newly-built house acquisition period (including 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,

Article 99 of the Enforcement Decree of the Restriction of Special Taxation Act (amended by Presidential Decree No. 17458 of Dec. 31, 2001) (3) The term “house as prescribed by the Presidential Decree” in Article 99 (1) 2 of the Act means a house falling under any of the following subparagraphs:

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”), which is acquired by a person who concludes a direct sales contract with a housing association, etc. and pays the down payment within the new house acquisition period under Article 99 (1) 1 of the Act (hereafter in this

2. A house acquired by a member of a housing association, etc. and subject to an approval for use or inspection for use at the expiration of the newly-built house acquisition period: Provided, That it shall be limited to the case where a housing association, etc. has received the down payment by directly concluding a sales contract for the remaining house (based on the sales contract concluded for the first time

Addenda No. 17458, 31, 201

Article 1 (Enforcement Date) This Decree shall enter into force on January 1, 2002.

Article 11 (Application Cases of Scope of Members Exempted from Transfer Income Tax) The amended provisions of Article 99-3 (3) 2 and (5) shall apply to the portion acquired for the first time after this Decree enters into force.

(1) With respect to the income accruing from the transfer of a newly-built house (including land attached to the same house, which is less than twice the total floor area of the relevant building; hereafter in this Article the same shall apply) falling under any of the following subparagraphs located in an area other than an area prescribed by the Presidential Decree, where a resident (excluding a housing construction business operator) is likely to rapidly increase or decrease the real estate price in consideration of the national consumer price inflation rate and the inflation rate of national house trade prices, within five years from the date of its acquisition, the tax amount equivalent to 100/100 of the transfer income tax shall be reduced or exempted, and where the newly-built house is transferred after five years from the date of its acquisition, the transfer income accruing for five years from the date of acquisition shall be subtracted from his income amount subject to the transfer income tax: Provided, That this shall not apply where the relevant newly-built house falls under the expensive house excluded from those subject to exemption from the transfer income tax under subparagraph 3 of Article 89 of the Income Tax Act

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 acquisition period”): Provided, That a house that has been occupied as of the date of a sales contract under the Housing Construction Promotion Act or an redevelopment association under the Urban Redevelopment Act, and that has a fact falling under the causes prescribed by the Presidential Decree, shall be excluded from

2. For a newly-built house (including a house acquired by a housing association under the Housing Construction Promotion Act or a member as prescribed by the Presidential Decree through an redevelopment association under the Urban Redevelopment Act), a newly-built house that has been approved for use or inspection for use (including

Addenda

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

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

(1) Where a newly-built house, which was concluded with a housing constructor for the first time before this Act enters into force under the previous provisions of Article 9 (1) or 99-3 (1), has been paid a down payment, or which was approved for use or inspection for use (including approval for temporary use) has been granted after this Act enters into force, the previous provisions shall apply to the calculation of the income amount subject to the abatement or exemption of transfer income tax and the object of 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 at

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