Whether Article 273-2 of the former Local Tax Act, which provides for the reduction of acquisition tax on liquidation money to be borne by members who acquired new houses, etc. through housing redevelopment projects and urban environment rearrangement projects, may be applied to the acquisition tax on the house acquired due to oil transactions (negative)

In full view of the legislative intent and nature of liquidation money under Articles 105(10), 109(3), and 273-2 of the former Local Tax Act (amended by Act No. 9758, Jun. 9, 2009; hereinafter the same) and Article 55(2) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, the acquisition of newly-built housing by a cooperative member pursuant to a housing redevelopment project and an urban environment rearrangement project (hereinafter “urban environment rearrangement project, etc.”) cannot be deemed as acquisition of a house on the ground of “transaction”, and it cannot be deemed that the cooperative member shared liquidation money while acquiring a newly-built housing, etc. by an urban environment rearrangement project, etc. Therefore, Article 273-2 of the former Local Tax Act cannot be applied to acquisition tax on liquidation money to which a cooperative member who acquired a newly-built

Articles 105(10) (see current Article 7(8)), 109(3) (see current Article 74(1) of the Restriction of Special Local Taxation Act), 273-2 (see current Article 40-2 of the Restriction of Special Local Taxation Act) of the former Local Tax Act (Amended by Act No. 9758, Jun. 9, 2009); Article 55(2) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents.

Plaintiff

The head of Yongsan-gu Seoul Metropolitan Government (Law Firm Han-gu, Attorneys Hong-soo et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2010Nu15515 decided December 16, 2010

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

The grounds of appeal are examined.

According to Article 109(3) of the former Local Tax Act (amended by Act No. 9758, Jun. 9, 2009; hereinafter the same), acquisition tax shall not be imposed on the land and buildings acquired by the owner of real estate subject to the relevant project by implementing the housing redevelopment project and the urban environment rearrangement project (hereinafter “urban environment rearrangement project, etc.”), but where the value of the newly acquired real estate exceeds the value of the previous real estate, the liquidation amount shall be subject to acquisition tax. This is also the object of taxation of the urban environment improvement project association, etc. where a new house, etc. is sold to members of the association through the approval of the management and disposal plan under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (hereinafter “Urban Improvement Act”) and the procedures for the public announcement of transfer thereof, the right to new house, etc. has been acquired by exchanging or changing the right to the previous house, but the liquidation amount has the substance of acquiring property higher than the value of the previous house, so that the association can only impose acquisition tax (see Supreme Court Decision 2010Du17365, May 10, 20, 20).

Meanwhile, Article 273-2 (hereinafter “instant mitigation provision”) of the former Local Tax Act provides that acquisition tax shall be reduced by 50/100 with respect to “housing acquired as a cause of floating transactions.” This is to be introduced to the purport that, as the real estate transaction report system was implemented from January 1, 2006, the burden of transaction tax is increased as a result of the enforcement of the real estate transaction report system, and the burden of transaction tax is mitigated as a supplement to the increase in the ownership price of housing, thereby promoting residential stability support and housing transaction activation. Accordingly, this is to be applied only to the case where the property was acquired as a “real estate” as well as to the case where the property was acquired as a “transaction.”

In full view of the legislative intent of the aforementioned provisions and the nature of liquidation money, the acquisition of newly-built housing by an association member due to an urban environment rearrangement project, etc. cannot be deemed as acquisition of housing on the ground of “transaction,” and it cannot be deemed any different from the fact that the association members shared liquidation money while acquiring newly-built housing by an association member. Therefore, the provision on mitigation of this case cannot be applied to acquisition tax on liquidation money borne by an association member who acquired newly-built

Nevertheless, under the premise that the instant mitigation provision applies to the above liquidation money, the lower court determined that acquisition tax should be reduced by applying the instant mitigation provision to the part corresponding to the liquidation money among the housing acquired by the Plaintiff, a member of an urban environment rearrangement project association, in accordance with the management and disposal plan after the completion of the instant urban environment rearrangement project. In so determining, the lower court erred by misapprehending the legal doctrine on the subject of the instant mitigation provision, thereby adversely affecting the conclusion of the judgment. The allegation contained in the

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Chang-suk (Presiding Justice)