Early High Court Decision 2009Du0570 ( October 13, 2009)

Where one house and land annexed to another house are owned together, the obligation to pay the comprehensive real estate holding tax.

In cases where one house and land annexed to another house are owned concurrently from the date on which the tax liability was established in 2009, it shall be regarded as one house per household.

The contents of the decision shall be the same as attached.

1. The plaintiff's claim is dismissed.

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

The Defendant’s disposition of imposition of KRW 5,959,190 of the comprehensive real estate holding tax for the year 2008 against the Plaintiff on November 20, 2008 (the amendment of the purport of the claim and supplement of the cause of the claim appears to be clerical error in November 26, 2008) is revoked.

1. Details of the disposition;

가. 원고는 2008. 6. 1.(2008년 종합부동산세 과세기준일) 현재 성남시 분당구 ★★ 동 13-1 ☆☆☆☆파라곤 아파트 105동 1201호(전용면적 166.38㎡ 공시가격 12억 원, 이하 '이 사건 아파트'라고 한다.)와 용인시 처인구 ○○동 ●●리 206-3 대 734㎡(이하 '이 사건 토지'라고 한다.)를 각 소유하고 있다.

B. On the land of this case, there is a residential building owned by ombs (hereinafter referred to as "the building of this case"), and the land and buildings of this case are referred to as "the house of this case".

C. On November 20, 2008, the Defendant imposed and notified the Plaintiff a comprehensive real estate holding tax of KRW 6,862,760, and special rural development tax of KRW 1,372,550, respectively (hereinafter referred to as “the first disposition”).

D. On January 16, 2009, the Defendant, applying Article 3 of the Addenda of the Comprehensive Real Estate Tax Act (amended by Act No. 9273, Dec. 26, 2008) to the Plaintiff, corrected the total real estate tax in 2008 to KRW 5,959,190; and the special rural development tax to KRW 1,191,840 (hereinafter “the disposition of this case”).

E. On February 11, 2009, the Plaintiff filed an appeal with the Tax Tribunal on February 11, 2009, but was dismissed on June 3, 2009.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 3, Eul evidence Nos. 1 and 3 (including paper numbers), the purport of the whole pleadings

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The instant disposition is unlawful for the following reasons.

(1) Although the instant land is used as a site, it does not themselves be a house. It is against the principle of no taxation without the law prohibiting the extended interpretation as it is based on the Defendant’s arbitrary interpretation, and thus violates the spirit of the Constitutional Court’s decision on November 13, 2008, 2006Hun-Ba12, 2006Hun-Ba112, 88, 94, 2008Hun-Ba3, 62, 2008Hun-Ba12, which was declared by the Constitutional Court on November 13, 2008.

(2) Article 180(1) of the Local Tax Act, which provides for the inclusion of land annexed to a house, is in violation of the Constitution.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

(1) Determination on the first argument

(A) Under the principle of no taxation without law, the interpretation of tax laws and regulations shall be interpreted as the text of the law, barring special circumstances, and shall not be extensively interpreted or analogically interpreted without reasonable grounds. In particular, it accords with the principle of equity in taxation to strictly interpret the provisions that can be seen as clearly preferential provisions among the requirements for reduction and exemption (see, e.g., Supreme Court Decision 2008Du11372, Aug. 20, 2009).

Article 7 (1) of the Comprehensive Real Estate Tax Act (amended by Act No. 9273 of Dec. 26, 2008; hereinafter referred to as the "former Comprehensive Real Estate Tax Act") provides that "any person who is liable to pay property tax on housing as of the taxable base date and exceeds 600 million won by adding the officially announced price of the house which is subject to property tax in Korea shall be liable to pay comprehensive real estate tax." In this context, "housing" means all or part of the building with the structure in which members of a household can carry on an independent residential life for a long time, and land annexed thereto [Article 2 subparagraph 3 of the Comprehensive Real Estate Tax Act, Article 180 subparagraph 3 of the Local Tax Act, Article 2 subparagraph 1 of the Housing Act (amended by Act No. 9405 of Feb. 3, 2009; hereinafter the same shall apply], and "owner of housing portion" means a person liable to pay property tax on housing portion under Article 181 of the Local Tax Act and Article 183 of the Local Tax Act.

In a systematic and comprehensive interpretation of the relevant provisions of the former Gross Real Estate Tax Act and the Local Tax Act, if the owner of a building and its appurtenant land are different, the part corresponding to the standard market value ratio of appurtenant land in the publicly announced price of the relevant house should be added to the publicly announced price of the relevant house in addition to other houses owned by the owner of appurtenant land. In addition, other than the instant apartment, the Plaintiff, which owned a part of the instant apartment in addition to the instant apartment, cannot be deemed to have owned only one house which is subject to property tax, and thus, it is reasonable to deem that such interpretation does not constitute a single house owner under the Comprehensive Real Estate Tax Act (amended by Act No. 9710, May 27, 2009). Such interpretation does not constitute an extended interpretation or analogical interpretation contrary to the principle of no taxation without law.

(B) On November 13, 2008, the Constitutional Court rendered a ruling of inconsistency with the Constitution as follows with the provision on imposition of comprehensive real estate holding tax on housing in the case of 2006HunBa12, 2006HunBa112, 207HunBa71, 88, 94, 2008HunBa3, 62, 208HunBa12 (merged) (hereinafter referred to as the "decision of inconsistency with the Constitution").

(1) Since the former Gross Real Estate Tax Act (amended by Act No. 7328, Jan. 5, 2005; Act No. 7836, Dec. 31, 2005); Articles 7(1) and 8, the former part of Article 9 of the Gross Real Estate Tax Act (amended by Act No. 7836, Dec. 31, 2005); the former part of Article 7(1) with the exception of the comprehensive real estate tax (amended by Act No. 7836, Dec. 31, 2005); Articles 8(1) and 9(1) and (2) (hereinafter referred to as the “Rules on Imposition of Gross Real Estate Tax on Housing”) provides for a taxpayer of comprehensive real estate holding tax, who owns only a house with the purpose of residence, for which the taxpayer has no specific asset or income, or for which the period of possession falls short of the period of taxation, it is not in violation of the principle of statutory reduction or exemption, etc. of property rights or other reasons for taxation purposes.

② If a provision on the imposition of comprehensive real estate holding tax on housing in this case is declared as a simple unconstitutional constitution and thus becomes void immediately, unlike the case of the provision on aggregate taxation for each household subject to comprehensive real estate holding tax on housing in accordance with the principle of simple unconstitutionality, a legal gap occurs, such as making it impossible to impose the comprehensive real estate holding tax on the housing portion before the roll of the comprehensive real estate holding tax on the housing portion, notwithstanding the declaration of simple unconstitutionality. This, unlike the case of the provision on aggregate taxation for each household subject to imposition of comprehensive real estate holding tax on the housing portion, in certain cases, would not impose the comprehensive real estate holding tax on all taxpayers of comprehensive real estate holding tax in this case, unlike the purport of the decision of the unconstitutionality of this case, which infringes on the taxpayer’s property rights, it would result in unfair results in preventing them from imposing the comprehensive real estate holding tax on all the taxpayers of comprehensive real estate holding tax on housing in this case, and it would result in a decrease in tax revenue and considerable influence on the national treasury, and in particular, it would be possible to resolve the constitutional problems through the legislative decision.

In light of the contents and main reasons of the decision of inconsistency with the Constitution of the Republic of Korea and the contents and timing of its enforcement under Articles 7 through 9 of the Comprehensive Real Estate Holding Tax Act, which was amended by Act No. 9273 on December 26, 2008, the Constitutional Court rendered a decision of inconsistency with the Constitution as to the imposition of the comprehensive real estate holding tax on the housing of this case, which is a provision on the imposition of the comprehensive real estate holding tax on the land of this case, is clearly determined by the decision of inconsistency with the Constitution, to maintain the validity of the taxation of the comprehensive real estate holding tax by applying the detailed provisions on the real estate holding tax on the housing of this case in order to avoid various side effects in a case where the provision on the imposition of the comprehensive real estate holding tax on the housing of this case is null and void as soon as possible. Accordingly, the decision of inconsistency with the Constitution of the Republic of Korea cannot be understood as

(C) Meanwhile, Article 8(4) of the Gross Real Estate Tax Act, amended by Act No. 9710 on May 27, 2009, provides that a person shall be deemed a single house if he/she owns a house and land annexed to a house different from that of a house. This provision is a newly established provision in order to alleviate the tax burden of a taxpayer corresponding thereto, and is applied from the establishment of tax liability in 2009 pursuant to the Addenda of the same Act, and does not apply to the instant disposition on the portion of 2008. Thus, the instant disposition cannot be deemed unlawful on the ground of the above amended provision.

(D) Ultimately, we cannot accept all of the Plaintiff’s assertion on this part.

(2) Judgment on the second argument

As to what contents of tax laws and regulations, the issue should be determined by policy and technical judgment based on accurate data on the actual state of national finance, social economy, national income, people's lives, etc., which is the matter to be determined by the legislator's legislative and technical judgment (see, e.g., Constitutional Court Order 2005HunBa75, 2006HunBa78, Jan. 17, 2007). Therefore, the provision of taxation requirements and exceptional non-taxation or tax exemption requirements in the tax law belongs to the legislative discretion of the legislator unless such provision is clearly unreasonable (see, e.g., Supreme Court Decision 9Du7265, May 29, 2001).

Considering that Article 180 Subparag. 3 of the Local Tax Act provides that a residential space in which a household member can carry on an independent residential life for a long time as well as the land annexed thereto is necessary, and that a residential building and land annexed thereto are treated as one house in economic and economic aspects, and that the price of both a building and land annexed thereto is included in the housing price, it shall not be deemed unconstitutional since Article 180 Subparag. 3 of the Local Tax Act provides that a housing component is within the scope of reasonable legislative discretion to include the land annexed thereto, other than the building, in the housing component pursuant to Article 2 Subparag. 1 of the Housing Act

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.