Early High Court Decision 2009Du1963 (Law No. 24, 2009)

Whether it can be viewed as a case where three houses have been inevitably made in the process of acquiring a substitute house

Although it is argued that three houses inevitably exist in the process of acquiring a substitute house and they are not subject to heavy taxation for one household, it is difficult to reasonably explain the necessity, circumstances, etc. of purchasing a house.

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

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

The Defendant’s disposition of imposing KRW 322,807,286 on E on January 14, 2009 is revoked.

1. Details of the disposition;

A. On March 26, 1993, the Plaintiff Song-A, the husband of this case B, thisCC, and this DD, E-E, the father of this case, acquired F apartment units No. 134,204, F apartment units No. 134, 204 (hereinafter “the head apartment unit of this case”), and resided together with the Plaintiffs at this place (this case’s head apartment unit from March 10, 2004 to reside in other places than the F apartment units of this case’s F apartment units of 07,00,000,000, 55,000,000, 20G rental houses of this case, and 2G rental houses of this case, the Plaintiff was paid the remainder of the sale price of the F apartment units of this case from 07, 200, 20G rental houses of this case to 07, 200, 20G rental houses of this case, and 2G rental houses of this case.

B. In addition, on October 20, 2006, the network EE purchases from DahH the purchase price of KRW 230,000,000 from 361 MM apartment No. 1107 (hereinafter “instant MM apartment”), and the down payment of KRW 30,000,000 for the contract date, intermediate payment of KRW 20,000 for the contract date, and the intermediate payment of KRW 180,000 for the remainder on October 31, 2006 and December 10, 2006, the remainder amount of KRW 135,000,000 for the rental debt of the instant MM apartment shall be adjusted to succeed to this network, and the registration of ownership transfer for the instant apartment shall be completed in its name on December 1, 206.

C. Meanwhile, on the other hand, on December 17, 2006, the Plaintiff Song-A purchased the Plaintiff’s new apartment Nos. 401 (hereinafter “new apartment”) of Eunpyeong-gu Seoul from the Dao Housing Co., Ltd. on the ground of the purchase price of KRW 190,000,000,000 for the purchase price, and the down payment of KRW 20,000,000 for the contract date, the intermediate payment of KRW 20,000 shall be paid on December 23, 2006, the remainder of KRW 30,000,000 for the lease deposit of KRW 120,000,000 for the new apartment in the instant new apartment, and completed the registration of ownership transfer under the name of the Plaintiff Song-A.

D. However, at the time of the transfer of the F Village apartment in this case by the Network E, the Defendant applied 60% of the heavy tax rate on the ground that the Plaintiff owned the instant MM apartment in its name other than the F Village apartment in this case, and the Plaintiff, the spouse of the Plaintiff, was the three housing owners of the household under the name of SongA, and applied 60% of the heavy tax rate on the ground that the transfer price was calculated by using the actual transaction price as the transfer price, and then determined and notified the transfer income tax amount of KRW 322,807,286, including the penalty tax on the failure to report and the nonperformance of payment (hereinafter “instant disposition”).

E. On March 21, 2009, the network EE died of the process of protesting against the instant disposition, and thus, the tax liability following the instant disposition was inherited to the Plaintiffs.

[Ground of recognition] Unsatisfy, entry of Gap evidence 1 through 6 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

(1) Article 155(1) of the Enforcement Decree of the Income Tax Act (hereinafter “the instant provision”) aims to extend the concept of one house for one household in case of replacing existing houses, and in case where the owner of one house temporarily owns several houses in the course of transfer for the purpose of replacing another house without the purpose of speculation, it shall be regarded as one house for one household subject to non-taxation, and in case where the owner of one house temporarily owns several houses in the course of transfer for the purpose of acquiring a substitute house for another house without the purpose of speculation, as in the instant case, there is no reason to deal with three houses for one household temporarily or two houses for one household temporarily, and in case where it is recognized that two houses temporarily become two houses are transferred for the purpose of acquiring a substitute house, the instant provision shall be applied to the case where two houses are exceeded two houses, so the income accrued from the transfer of the FF apartment shall be subject to non-taxation.

(2) If the provision of this case exceeds two houses newly acquired in the language and text of the provision of this case, the provision of this case cannot be applied, provided that the purport of Article 89(1) of the Income Tax Act concerning non-taxable capital gains under Article 23 of the Constitution on the Guarantee of Property Rights of the people and the provision of Article 89(1) of the Income Tax Act is inconsistent with the Constitution and the Income Tax Act, which is a mother corporation and its mother corporation, and thus, the application of the provision concerning non-taxable capital gains under Article

(3) As in the instant case, the heavy tax rate may not be applied to three houses for one household, in a case where only three houses were inevitably held in the process of transferring an existing house and acquiring a substitute house for the purpose of relocation, and where it cannot be deemed that they actually possessed three houses.

(b) Related statutes;

It is as shown in the attached Table related statutes.

C. Determination

(1) Judgment on the plaintiffs' assertion

(A) In light of the principle of no taxation without law, or the requirements for tax exemption or exemption, the interpretation of tax laws shall be interpreted as the text of the law, barring any special circumstances, and it shall not be permitted to expand or analogically interpret without reasonable grounds. In particular, it accords with the principle of fair taxation to strictly interpret the provisions that can be seen as clearly preferential provisions among the requirements for tax exemption or exemption (see, e.g., Supreme Court Decision 2003Du7392, May 28, 2004).

(B) He returned to the instant case, and the provision of this case applies to the case where one household having one house in Korea has come to possess two houses temporarily by acquiring another house before transferring the relevant house. As seen earlier, as long as the network E had already been holding the instant MM apartment around January 24, 2007 at the time of the transfer of the instant FM apartment, and the Plaintiff SongA had the instant new apartment, as long as the Plaintiff had the instant new apartment, the provision of this case concerning the transfer of the instant MM apartment cannot be deemed to be applicable, and it is not allowed to apply by analogy the provision of this case under the principle of strict interpretation. Accordingly, this part of the Plaintiffs’ assertion is without merit.

(2) Judgment on the plaintiffs' assertion

(A) The purpose of the Income Tax Act, which provides for a multi-household such as a three-household, is to restrain speculative demand for housing and land, to promote stability in the real estate market and the balance of taxation by absorbing gains from real estate speculation into taxes. The purpose of not imposing income tax on the income accruing from the transfer of one house for one household is to transfer a house owned by one household in Korea, which is the basis of citizen’s residential life, and thus, to ensure the stability of citizens’ residential life and the freedom of their residence by failing to impose income tax on the transfer income in specific cases where it can be deemed that the transfer of one house owned by one household is not a temporary residence or ownership for the purpose of acquiring capital gains tax or speculation, but is not a transfer of one house for the purpose of acquiring another house temporarily (see, e.g., Supreme Court Decision 92Nu12988, Jan. 19, 193). In particular, the purpose of taxation that is exempt from taxation on two-households for the purpose of acquiring a house by one household temporarily possessing another house within 20 years prior to acquire it (see, 208.7.).

(B) In light of the language and purport of the above provisions of the Income Tax Act and the Enforcement Decree of the Income Tax Act, this case’s provisions aim at stabilizing the real estate market by absorbing gains from real estate speculation as taxes, while ensuring the stability of the residential life and the freedom of movement of residence in consideration of the reality of real estate transactions. It is difficult to say that the temporary one household becomes two houses for the purpose of acquiring real estate as a single house for one household, so it is difficult to say that the purpose of acquiring capital gains tax is to obtain capital gains tax or speculation, and that the transfer income tax is not imposed on the temporary one household when it becomes three houses for one household, unlike the temporary one house for one household, it is difficult to BB difficult to say that there is no purpose of obtaining capital gains tax or speculation with the exception of one house for one household, and thus, it does not constitute a violation of the principle of excessive prohibition under the Constitution or delegation of the specific scope of one house for one household that is exempt from capital gains tax by the transfer income tax under Article 89 of the Income Tax Act.

(3) Judgment on the plaintiffs' assertion

(A) In a case where a person transfers a house and acquires a substitute house for the purpose of relocation, but it cannot be deemed that he actually possessed three houses, it does not constitute an object of taxation among three houses for one household under Article 104(1)2-3 of the former Income Tax Act (see Supreme Court Decision 2009Du13788, Dec. 24, 2009).

(B) The following facts are revealed: (a) He returned to the instant case; (b) He had concluded a two-year lease agreement with the buyer to continuously reside in the FF Village apartment in the instant FF Village; and (b) comprehensively taking account of the entire purport of the arguments in the evidence Nos. 5 and Nos. 2, the LE transferred the instant MM apartment to approximately KRW 250,000,000 on August 7, 2008, when the LE acquired the instant MM apartment, KRW 20,000,000,000; and (b) Plaintiff Song-A continued to move from 208,000,000,000,000 won for 1 year and 1 million,000,0000,0000 won for the instant new apartment; and (c) Plaintiff Song-gu’s 20,000,000 won for 20,000,000 won for 20,000.

According to the above facts, the network E appears to have had the intention to continue residing in the apartment after the conclusion of the sales contract for the F Village of this case, and it cannot be deemed that the MM apartment or new apartment acquired with the sale price was purchased for the purpose of residence in light of the circumstances of transfer since the plaintiffs did not actually reside, and even if the purchase was made for the purpose of domestic residence, it is difficult to reasonably explain the necessity and circumstances of the old business. Therefore, it is difficult for the network E and the plaintiff Song-A to transfer the MM apartment of this case to transfer the MM apartment of this case and the new apartment of this case with the funds, and it is difficult to say that the process of acquiring the MM apartment or new apartment of this case was inevitable to possess three houses in the process of acquiring the substitute house for the purpose of relocation, and it cannot be viewed that it actually possessed three houses, and therefore, this part of the plaintiffs' assertion is without merit.

3. Conclusion

Therefore, the plaintiffs' claims are dismissed in entirety as it is without merit. It is so decided as per Disposition.