Whether a household can be deemed as two houses for one household in cases where the household temporarily owns three houses.

Where one household temporarily possesses two houses, unlike the application of special provisions to one house for one household, if it transfers the previous house while temporarily possessing three houses, it shall not be deemed as two houses for one household, and the disposition imposed on one household as three houses for one household is lawful.

Article 96 (Transfer Price)

1. The plaintiff's appeal is dismissed.

2. Litigation costs shall be borne by the plaintiff.

The judgment of the first instance shall be revoked. The defendant's imposition of capital gains tax of KRW 38,662,370 against the plaintiff on July 5, 2005 shall be revoked.

1. Details of the disposition;

A. On June 23, 1989, the Plaintiff acquired and owned ○○○○○○ apartment, ○○○○ apartment, ○○○○○○○ apartment (hereinafter “instant apartment 1”) and transferred it to Kim○○ on March 26, 2003. On May 31, 2003, the Plaintiff calculated gains from transfer by using the standard market price at the time of the transfer of the instant apartment as the transfer value, and paid capital gains tax of KRW 33,117,070 for the transfer income tax of 203.

B. At the time of the Plaintiff’s transfer of the first apartment of this case, the Defendant: (a) owned the building on the ground of ○○○○○○○○○○○○○ apartment in the name of the Plaintiff other than the above apartment; and (b) owned the ○○○○○○○○ apartment in the name of the spouse, ○○○○○○○○○○○○○ apartment in the name of the spouse; and (c) owned the ○○○○○ apartment in the name of ○○○○○○○○○○○○○○ apartment in the name of the spouse, which constitutes three houses for one household; (d) applied Article 96(1)7 of the Income Tax Act (amended by Act No. 7006 of Dec. 30, 203; (e) applied Article 96(1)7 of the former Income Tax Act to the Plaintiff on July 5, 2005, calculated gains from transfer by using the actual transaction price of the first apartment of this case as the transfer price.

Facts without dispute over the basis of recognition, Gap evidence 1, 2, 6, 7, 8, Eul evidence 1 and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The parties' assertion

The defendant asserts that the disposition of this case is lawful on the grounds of the above disposition and the relevant statutes, and the plaintiff asserts that the disposition of this case is unlawful on the following grounds.

(1) The building of this case has lost its function as a house at an auction procedure to preserve the claim, and after the disposition of this case, it was found that all of the members of the previous owner of the building of this case had resided in the building of this case and completed removal by ordering the above building, and it is not specified in Article 96 (1) 7 of the Income Tax Act or Article 162-2 (5) of the Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 18173 of Dec. 30, 2003; hereinafter referred to as the "former Enforcement Decree"), and it shall be a house exceeding 30 million won in order to constitute three houses for one household. In light of the fact that the building of this case is a house under the premise that the standard market price is less than 30 million won, the disposition of this case is unlawful.

(2) The purport of Article 96(1)7 of the former Income Tax Act and Article 162-2(5) of the former Enforcement Decree is to eradicate real estate speculation, and the Plaintiff’s acquisition of real estate for the purpose of speculation is not an actual purpose, and thus, it is not subject to the relevant statutes.

(3) Article 155(1) of the former Enforcement Decree provides that where one household who owns one house temporarily becomes two houses for the purpose of moving residence, if it transfers the previous house within one year, it shall be deemed as one house for one household. The Plaintiff acquired the instant apartment house for the purpose of moving residence for the purpose of moving residence, and transferred the instant apartment 1 within one year thereafter, and moved into the said apartment 2 apartment. Therefore, the Plaintiff shall be deemed as one house for one household, considering the purport of Article 155(1) of the former Enforcement Decree, since the Plaintiff is temporarily deemed as three houses, the Plaintiff shall not be deemed as two houses for one household.

B. Relevant statutes

Article 89 of the Income Tax Act (amended by Act No. 7006 of Dec. 30, 2003)

No income tax on transfer income (hereinafter referred to as “transfer income tax”) shall be levied on the following incomes:

3. Income accruing from a transfer of such one house for one household as prescribed by the Presidential Decree (excluding expensive houses whose prices exceed the standard prescribed by the Presidential Decree) and the appurtenant land within the area calculated by multiplying the area of land on which the building is built by the distribution rate as determined by region under the Presidential Decree

○ Transfer Value of Article 96 of the Income Tax Act (amended by Act No. 7006 of Dec. 30, 2003)

(1) The transfer value of assets referred to in Article 94 (1) 1 and 2 shall be the standard market value at the time of transfer of the assets concerned: Provided, That where the assets concerned fall under any of the following subparagraphs, the actual transaction value between the transferor and transferee (hereinafter referred to as “actual transaction value”) shall apply:

7. Other cases prescribed by Presidential Decree in consideration of types, period of holding, number of possession, scale of transaction, transaction methods, etc. of the relevant assets.

Article 154 of the Enforcement Decree of the Income Tax Act (amended by Act No. 18173, Dec. 30, 2003) Scope of “one house for one household”

(1) The term “one house for one household as prescribed by the Presidential Decree” in subparagraph 3 of Article 89 of the Act means the case where a household comprised by a resident and his spouse together with the family members living together with him at the same address or same place of residence as of the date of transfer has one house in Korea as of the relevant date, and where the relevant house has been held for not less than 3 years (in the case of the house located in the subdivision, day, square village, mountain village, mountain village and new urban area designated and publicly notified as a planned area for housing site development under Article 3 of the Seoul Special Metropolitan City, a Si, a Si, and a Housing Site Development Promotion Act, the relevant house held for not less than 3 years

Article 155 of the Enforcement Decree of the Income Tax Act (amended by Act No. 18173 of Dec. 30, 2003), the special case for one house for one household

(1) Where one household which has one house in the Republic of Korea comes to possess two houses temporarily by acquiring another house (including the case where it acquires by constructing by itself) before transferring the relevant house, if it transfers the previous house within one year (including the case where unable to transfer within one year, and which falls under the causes as determined by the Ordinance of the Ministry of Finance and Economy) from the date of acquiring another house, it shall be regarded as one house for one household, and the provisions of Article 154 (1) shall be applicable. In this case, where a part of previous house and appurtenant land is purchased through consultation or expropriated under Article 154 (1) 2 (a), and where it transfers the relevant remaining house and appurtenant land within two years from the date of such transfer or expropriation, the transfer of relevant remaining house and appurtenant land shall be deemed to be included in the transfer or expropriation of the previous house and appurtenant

○ Transfer Value of Article 162-2 of the Enforcement Decree of the Income Tax Act (amended by Act No. 18173, Dec. 30, 2003)

(5) The term "cases prescribed by Presidential Decree" in Article 96 (1) 7 of the Act means cases where one household possessing three or more houses transfers the house (including land annexed thereto).

C. Determination

(1) The plaintiff constitutes an oligopolistic shareholder under Article 39(1)2 of the Framework Act on National Taxes (A). The plaintiff was awarded a successful bid in the auction procedure for the building of this case on February 2, 1995, but from that time until March 26, 2003, at the time of transferring the first apartment house of this case, Kim ○ and his family continuously resided in the above building.

(B) The instant building consists of 43.03 square meters of a wooden roof 43.03 square meters, a wooden roof 49.65 square meters, and a wooden roof 13.24 square meters of a wooden roof 13.24 square meters, and was surrounded by a stone fence around the instant building.

(C) The instant building was written in the general building ledger and the certified copy of the register, but the Plaintiff removed the instant building after the instant disposition and completed the registration of destruction on December 16, 2005.

Each entry and video of subparagraph 4-1 through 7, subparagraph 5, subparagraph 9, subparagraph 2, subparagraph 3-1, and subparagraph 3-2, and the purport of the whole pleadings, which are grounds for recognition.

(ii)judgments

(A) Determination on the first argument

p) In a case where a person who transfers a house owns another building, whether the other building constitutes “house” shall be determined by whether the actual purpose of use is a building, regardless of the usage classification of the injury caused by the building. Even if the building is temporarily used for a non-residential purpose, the structure, function, or facility is in a state suitable for residence as an original residential purpose, and the residential function is maintained and managed as they are, and at any time, can be used as a house (see, e.g., Supreme Court Decision 2004Du14960, Apr. 28, 2005).

2) As seen in the above facts, although the Plaintiff did not use the instant building as a house, in light of the fact that Kim ○○ and its family members used it as a house until the time of the transfer of the instant apartment house, and in light of the structure and function of the instant building, and the usage classification of building and supplementary injury, it is reasonable to deem the instant building as a house regardless of the Plaintiff’s intention.

Furthermore, in this case where the transfer value of real estate is calculated based on the actual transaction value by determining the Plaintiff as three houses for one household pursuant to Article 96 (1) 7 of the former Income Tax Act or Article 162-2 (5) of the former Enforcement Decree, there was no separate provision that the standard market value should be exceeded 300 million won in the case of a house located in the territory outside the Seoul Metropolitan area and the Metropolitan City at the time of the transfer of the first apartment of this case (as amended on December 30, 2003, only the above provision was made when determining the transfer income tax rate of 60/10 in the case of a house of one household as 3 houses with the amendment

3) Therefore, the Plaintiff’s assertion on this part is without merit.

(B) Judgment on the second argument

Article 96 (1) 7 of the former Income Tax Act and Article 162-2 (5) of the former Enforcement Decree of the Income Tax Act that requires a report of the transfer value as the actual transaction price in the case of three houses for one household shall be based on the necessity of substantial taxation in addition to eradicating real estate speculation. In this case, even if the plaintiff, a third house owner for one household, did not have the purpose of speculation in this case, there is no restriction in the application of the above related Acts and subordinate statutes. Therefore

(C) Judgment on the third argument

In light of the principle of no taxation without law, or the requirements for non-taxation or tax reduction and exemption, the interpretation of tax laws and regulations shall be interpreted as the text of the law, barring special circumstances, and it shall not be allowed to expand or analogically interpret without reasonable grounds (see, e.g., Supreme Court Decision 2003Du7392, May 28, 2004).

Article 155(1) of the former Enforcement Decree provides that where one household having one house in Korea has come to possess two houses temporarily by acquiring another house before transferring the said house, if it transfers the previous house within one year from the date of acquiring the other house, it shall be deemed to be one house for one household, and the provisions of Article 154(1) of the former Enforcement Decree, which stipulates exceptionally the scope of one house for one household under certain conditions, shall be applied to the case of temporary two houses. In the case of temporary three houses, unless otherwise provided, the provision of Article 155(1) of the former Enforcement Decree shall not be extended or analogically applied to the case of three houses for one household. Therefore, the plaintiff's assertion on this part shall not be justified.

3. Conclusion

Therefore, the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.