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

The grounds of appeal are examined.

1. Article 94(1)1 of the former Income Tax Act (amended by Act No. 11146, Jan. 1, 2012; hereinafter “Income Tax Act”) provides for “income accruing from the transfer of land or a building” as one of the capital gains subject to taxation. Article 95(2) of the same Act provides for the special long-term holding deduction amount to be deducted from gains from transfer, and the main text of Article 95(2) provides for “the amount calculated by multiplying the assets under Article 94(1)1 of the Income Tax Act, the holding period of which is not less than three years, by the deduction rate by holding period prescribed in Table 1 (from 10/100 to 30/100 according to the holding period) on the gains from transfer of the relevant assets,” and the proviso provides for “the amount calculated by multiplying the gains from transfer of the relevant assets by the holding period by the deduction rate prescribed in Table 2 (from 24/100 to 80/100 according to the holding period).”

In addition, Article 159-2 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 22580, Dec. 30, 2010; hereinafter “Enforcement Decree of the Income Tax Act”) provides that “one house for one household prescribed by Presidential Decree” in the proviso to Article 95 (2) of the Act means the house (including the house deemed one house for one household under Articles 155, 155-2, 156-2 and other provisions) where one household owns one house in the Republic of Korea as of the date of transfer, and Article 154(8)1 of the Enforcement Decree of the Income Tax Act provides that “in the calculation of the residence period or retention period of one house for one household, the house reconstructed due to the loss or aging during the residence period or retention period, etc. shall be aggregated with the residence period and retention period of the destroyed house and reconstructed house.

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