Where land category is changed due to the change of use of a building, whether it falls under land without officially announced land price.

Where it is evident that the land category of the cadastral law does not fall under "land whose land category has been changed due to the change of the form and quality of land or the change of the use thereof, the disposition of imposition on the premise

Article 164 (Assessment of Standard Market Price of Land and Building)

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition of imposition of capital gains tax of KRW 122,955,930 against the Plaintiff on January 10, 2005 shall be revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

The following facts are not disputed between the parties, or acknowledged by taking account of the overall purport of the arguments in Gap evidence 2, Gap evidence 7-1, 2, Eul evidence 1, Eul evidence 2, and Eul evidence 3.

A. On June 28, 2004, the Plaintiff transferred his/her ownership share to ○○○○○○○○○○○○-dong, ○○○, ○, ○○, and ○○○○-2 square meters in total (hereinafter referred to as “soil”) and filed a transfer income tax by calculating the transfer value applying the officially assessed individual land price as of January 1, 2003, to 1860,000 won.

B. The Defendant initially used the above land as a gas station site, and the use of the above land was changed due to the construction of the building for neighborhood living facilities on that ground. Accordingly, since the land category under the intellectual property law was changed from the miscellaneous land to the site, it constitutes the proviso of Article 99 (1) 1 (a) of the former Income Tax Act (amended by Act No. 7335 of Jan. 14, 2005; hereinafter referred to as the “Act”) and Article 164 (1) 3 of the Enforcement Decree of the Act (amended by Presidential Decree No. 18705 of Feb. 19, 2005; hereinafter referred to as the “Enforcement Decree”), on the ground that it constitutes the “land without an individual land price” under Article 164 (1) 1 (a) of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 18705 of Feb. 19, 2005) and then the transfer price was calculated by applying 33.3333330,5000.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The instant disposition shall be revoked on the grounds that it is unlawful for the following reasons.

(1) The proviso of Article 99(1)1 (a) of the Act delegates the assessment of only the land for which the publicly assessed individual land price is not publicly announced in such a manner as prescribed by the Presidential Decree. Thus, Article 164(1) of the Enforcement Decree of the Act applies to a case where there is no publicly assessed individual land price among the land falling under each subparagraph of the same paragraph. Since the above land does not fall under the land for which the publicly assessed individual land price is publicly notified continuously, the disposition of this case based on the premise that the above land falls under the

(2) Even if not, Article 164(1)3 of the Enforcement Decree provides that "the land category of the intellectual law has changed due to the change of the form and quality of the land or the change of the purpose of the use thereof."

In order to fall under the "land without any officially announced individual land" under the above provision, the category of the cadastral law should be changed due to the "change in the form and quality of the land" or the "use change of the land". Since the above land constitutes a case where the category of the cadastral law is changed due to the "use change of the building", the disposition of this case on the premise that the above land falls under the above provision

B. Relevant statutes

It is as shown in the attached Form.

(c) Fact of recognition;

The following facts are acknowledged in each of the above evidence, evidence Nos. 6, and evidence No. 8 as a whole, unless there is a dispute between the parties, or as a whole by considering the purport of the entire pleadings.

(1) The above land was used as one of four parcels, and its original land category was the site. From August 23, 1994, ○○○, the father of the Plaintiff started the gas station business under the trade name called “○○○ Gas station” in the above land around August 23, 1994, and its land category was changed to miscellaneous land on March 14, 1997.

(2) On March 2, 2002, ○○○○ discontinued the gas station business, and thereafter, on March 30, 2002, 200, ○○○○○○○’s children, including the Plaintiff, who became co-owners of the above land, newly constructed the above land by obtaining a construction permit for Class 1 neighborhood living facilities of the second and fourth floors above the ground on the above land, and obtained the approval for the use of the above building from the competent authority on June 10, 2004.

(3) As above, co-owners of the above land, including BBB and the Plaintiff, filed an application for land category change of the above land. Accordingly, the head of ○○ City/Gu changed the land category of the above land to the site on the ground that the use of the building was changed on June 16, 2004.

D. Determination

(1) As to the assertion that Article 164(1) of the Enforcement Decree applies to a case where no officially assessed individual land price exists among the lands falling under each subparagraph of the same paragraph

(A) Articles 94(1)1, 96(1), and 99(1)1(a) of the Act and Articles 10(2) and 10-2 of the former Act on Public Notice of Values and Appraisal of Land, Etc. (amended by Act No. 7335, Jan. 14, 2005; hereinafter referred to as the “Public Notice of Values and Appraisal of Real Estate Act”) provide that the transfer value of land shall be based on the standard market price at the time of transfer, and the standard market price shall be based on the officially assessed individual land price under the Public Notice of Land Price Act: Provided, That the value of land for which no officially assessed individual land price exists shall be appraised by the method determined by the Presidential Decree, taking into account the officially assessed individual land price of neighboring similar land; in Article 164(1)3 of the Enforcement Decree, the land category of which under the Public Notice of Land Price Act has been changed due to changes in the form and quality of the land or changes in the purpose of use of the land; and in such case, the appraisal price shall be assessed by the head of neighboring land price.

(B) In light of the above provisions of the relevant laws and regulations, Article 164(1) of the Enforcement Decree shall be interpreted to the effect that the transfer value of the land stipulated in each of the following subparagraphs shall be assessed by the method stipulated in the above provision in light of the land without a publicly assessed individual land price. Unlike this, it cannot be interpreted to the effect that only the land without a publicly assessed individual land price among the land stipulated in each of the above subparagraphs is applied (the same shall apply in that it separately lists the land omitted in the determination and public notice of the publicly assessed individual land price in subparagraph 4). In addition, where the use of the land is changed, the comparison standard for calculating the publicly assessed individual land price shall also be changed due to a significant change in the goods, etc. of the land existing before and after the change in the use of the land. In such a case, the application of the previously assessed individual land price after the change in the previous land category shall be deemed to be one of the land without a publicly assessed individual land price under the above provision, and it shall be reasonable to apply the value assessed by the head of the tax office having jurisdiction over the place of tax payment

(2) As to the assertion that the category of a building under the intellectual law is changed due to the change of the purpose of use of a building, it does not constitute a "land without an individual land price" under Article 164 (1) of the Enforcement Decree.

(A) Article 164 (1) 3 of the Enforcement Decree of the Cadastral Act provides that "the land whose land category has been changed due to the change of the form and quality of the land or the change of the purpose of use of the land" as one of the land without a publicly assessed individual land price. It is reasonable to interpret the land whose land category has been changed under the Cadastral Act due to "the change of the form and quality of the land" or "the change of the purpose of use of the land". Article 21 of the Cadastral Act provides that the landowner shall apply to the competent authority within 60 days from the date of the change of land category as prescribed by the President. Article 16 of the Enforcement Decree of the Cadastral Act provides that "the change of land category is completed due to the change of land category" in subparagraph 1 of the National Land Planning and Utilization Act and Article 164 (1) 2 provides that "the change of the purpose of use of the land or a building can be applied for the change of the purpose of use of the land" in addition to "the change of the purpose of use of the land".

Considering that the land category of the designated land is "the purpose of use of the land under Article 1 of the Enforcement Decree of the Building Act" and "the purpose of use of the land is to change the land to a specific use zone (Article 38), urban natural park area (Article 38-2), urbanization-coordination zone (Article 39), fishery resources protection zone (Article 40), etc. In general, if the purpose of use of such land is changed, the construction act will be determined accordingly, and even if the construction is possible, the restriction on the use, building-to-land ratio, floor area, height, etc. of the building should be mitigated or strengthened, and the purpose of use of the building is to change the land category of the land under Article 2 (2) of the Building Act only if the land category of the designated land is changed to the original house, apartment house, first-class neighborhood living facilities, second-class neighborhood living facilities, sales facilities, transportation facilities, education and research facilities, sports facilities, accommodation facilities, accommodation facilities, factories, storage facilities, public land price change to the original purpose of the land, etc.

(B) Based on this point, it is clear that the above land does not constitute a "land whose land category has been changed due to the change of the form and quality of the land or the change of the use of the land under the cadastral law" under Article 164 (1) 3 of the Enforcement Decree, since the land category was changed from the land category to the land site due to the construction of Class 1 neighborhood living facilities on that ground. Thus, the above land does not constitute a "land whose land category has been changed due to the change of the form and quality of the land or the change of the use of the land under Article 164 (1)

3. Conclusion

Therefore, the disposition of this case shall be revoked in an unlawful manner, so that the plaintiff's claim shall be accepted for the reasons of its reasoning, and since the judgment of the court of first instance is unfair with different conclusions, the judgment of the court of first instance shall be revoked, and it is so decided as per Disposition with the cancellation of the disposition of this case

Where land category is changed due to the change of use of a building, whether it falls under land without officially announced land price.

Relevant statutes

former Income Tax Act (amended by Act No. 7335 of January 14, 2005)

Article 94 (Scope of Transfer Income)

(1) Transfer income shall be the following incomes generated in the relevant year:

1. Any income accruing from transfer of land (referring to a lot of land subject to registration of land category in the cadastral record under the Cadastral Act) or buildings (including the facilities and structures annexed to such buildings);

Article 96 (Transfer Price)

(1) The transfer value of assets referred to in Article 94 (1) 1 and 2 shall be based on the standard market price at the time of the transfer of the assets concerned.

Article 97 (Calculation of Necessary Expenses in Transfer Income)

(1) In calculating gains on transfer of a resident, necessary expenses to be deducted from the transfer value shall be as follows:

1. Acquisition value:

(a) In case of assets under Article 94 (1) 1 and 2, the standard market price at the time of the acquisition of the assets concerned;

Article 99 (Computation of Standard Market Price) (1) The standard market price prescribed in the main sentence of Article 96 (1), the main sentence of Article 97 (1) 1 (a), Articles 100 and 114 (5) shall be determined as follows:

1. Land or buildings under the provisions of Article 94 (1) 1:

(a) Land;

The officially assessed individual land price under the Public Notice of Values and Appraisal of Lands, etc. Act (hereinafter referred to as the “individual assessed land price”): Provided, That the value of land for which no officially assessed individual land price exists, shall be the amount assessed by the head of the district tax office having jurisdiction over the place of tax payment by the method as determined by the Presidential Decree in consideration of the officially assessed individual land price

Enforcement Decree of the same Act (amended by Presidential Decree No. 18705 of Feb. 19, 2005)

Article 164 (Assessment of Standard Market Price of Land and Building)

(1) For the purpose of the proviso of Article 99 (1) 1 (a) of the Act, the term “amount of money paid by such method as determined by the Presidential Decree” means the amount appraised by the superintendent of the competent district tax office having jurisdiction over the place of tax payment (where the head of the competent tax office having jurisdiction over the location of relevant land and the head of the tax office having jurisdiction over the location of relevant land are different, if there is a request from one another) pursuant to the comparative table under Article 10 (2) of the Act on Publication of Land Price and Evaluation of Land, etc. by deeming the neighboring land whose land price formation factors, such as the land category and utilization, etc., of which no officially assessed land price falling under any of the following subparagraphs, as the reference land price.

1. Newly registered land under the Cadastral Act;

2. Any land partitioned or merged under the Cadastral Act;

3. Land whose land category has been changed due to changing the form and quality of land or change of use;

4. Land (including State and public land) for which a determination and public announcement of the officially assessed individual land price are omitted;

(3) In the application of Article 99 (1) 1 (a) of the Act, where any acquisition or transfer is made before the new standard market price is determined, it shall be based on the immediately preceding standard market price.

Gu Land Price Disclosure and Land Appraisal Act (amended by Act No. 7335 of January 14, 2005) (amended by the Public Notice of Values and Appraisal of Real Estate Act, the Public Notice of Values and Appraisal of Real Estate Act)

Article 10 (Application of Officially Assessed Land Price)

(1) Where the State, local government-invested organizations under the Framework Act on the Management of Government-Invested Institutions, government-invested institutions under the Framework Act on the Management of Government-Invested Institutions, or other public organizations prescribed by Presidential Decree calculate the price of land for the following purposes, they shall maintain a balance between the price of the relevant land and the publicly announced price of the reference land on one or two occasions deemed to have similar usefulness to the relevant land:

(2) The Minister of Construction and Transportation shall, where he deems it necessary for the calculation of land prices for the purposes under paragraph (1), prepare a standard non-section of the standard land price and the land price to be calculated, and provide it to the relevant administrative agencies, etc., and the relevant administrative agencies, etc. shall calculate land prices by using it.

Article 10-2 (Determination, Public Announcement, etc. of Officially Assessedd Individual Land Price)

(1) The head of a Si/Gun/Gu shall, through deliberation by the Si/Gun/Gu Land Appraisal Committee under Article 12-2, determine and publicly announce the price per unit area of individual land (hereinafter referred to as "individually announced land price") within his/her jurisdiction as of the basic date of the officially announced land price every year in order to have it used for the assessment of land prices for the imposition of development charges under the Restitution of Development Gains Act and for other purposes prescribed by other Acts and subordinate statutes, and shall provide it to the relevant administrative agencies, etc., and may not determine and publicly announce the officially announced land price for the land which is not subject to imposition of taxes or charges, etc., and other land prescribed by Presidential Decree. In such cases, the officially announced

(2) The head of a Si/Gun/Gu shall determine and publicly announce the officially assessed individual land price on the land on which division, consolidation, etc. has occurred after the basic date, based on the dates prescribed by Presidential Decree.

(3) Where the head of a Si/Gun/Gu determines and publicly announces the officially assessed individual land price, it shall be calculated by using the land price ratification table on the basis of the publicly announced price of one or more reference land deemed to have similar usefulness to the relevant land, but the officially announced price of the relevant land and the officially announced price of reference land shall be balanced.

(8) Except as otherwise expressly provided for in paragraphs (1) through (7), matters necessary for the calculation, verification, determination, and public announcement of the officially assessed individual land price, the hearing of opinions from interested persons, the designation of appraisal business entities, etc. shall be prescribed by

Enforcement Decree of the Public Notice of Values and Appraisal of Real Estate Act (amended by the Enforcement Decree of the Public Notice of Values and Appraisal of Real Estate Act No. 18677 of January 14, 2005)

Article 12-2 (Individual Land Price of Land in Case of Division, Consolidation, etc.)

(1) "Land for which division, consolidation, etc. have occurred" in Article 10-2 (2) of the Act means land falling under any of the following subparagraphs:

1. Land partitioned or combined under the Cadastral Act;

2. Land newly registered under the Cadastral Act due to reclamation of public waters, etc.

3. Land whose land category has been changed due to changing the form and quality of land or change;

4. Land which becomes private land due to sale, etc. of state-owned or public land and for which no officially assessed individual land price exists.

(2) The officially assessed individual land price shall be determined and publicly announced as classified in each of the following subparagraphs for the land for which the cause under paragraph (1) occurs:

1. Determination and public announcement of land on which the cause as referred to in the provisions of paragraph (1) has occurred between January 1 and June 30, by October 31, counting the first day of July as the base date;

2. As to the earth and sand for which the cause referred to in the provisions of paragraph (1) has occurred between July 1 and December 31, the determination and publication shall be made on the first day of January of the following year as the base date and by June 30 of the following year.

Article 12-3 (Calculation, etc. of Officially Assessed Assessed Land Price)

(1) The Minister of Construction and Transportation shall determine the guidelines for inspection and calculation of the officially assessed individual land price under Article 10-2 (3) and (7) of the Act and notify the head of Si/Gun/Gu thereof, and the head of Si/Gun/Gu shall investigate and calculate the officially assessed individual land price in accordance

(2) The guidelines for investigation and calculation of the officially assessed individual land price referred to in paragraph (1) shall include the following matters:

1. Provisions in the special survey of land characteristics that affect the formation of land prices;

2. Matters concerning the selection of the reference land which serves as the basis for calculating the officially assessed individual land price (hereinafter referred to as "non-standard land");

3. Matters concerning the use of land price comparison table;

4. Other matters deemed necessary by the Minister of Construction and Transportation for the investigation and calculation of the officially assessed individual land price.

Article 12-8 (Determination and Public Announcement)

(1) Upon confirmation by the Minister of Construction and Transportation pursuant to Article 10-2 (6) of the Act, the head of a Si/Gun/Gu shall determine and publicly announce the officially assessed individual land price by June 30 (in cases of Article 12-2 (2), the date specified in each subparagraph of the same paragraph) each year.

Cadastral Act

Article 21 (Application for Land Category Change) Any landowner shall, where there exists any land to be changed of land category, file an application with the competent authority within 60 days from the relevant date under the conditions as prescribed by

Enforcement Decree of the Cadastral Act

Article 16 (Application for Land Category Change)

(1) The case where an application for land category change may be made under Article 21 of the Act shall be as follows:

1. Where construction works such as changing the form and quality of land are completed under related Acts and subordinate statutes;

2. End in the case of a change in the use of land or buildings; and

National Land Planning and Utilization Act

Article 2 (Definitions) The definitions of terms used in this Act shall be as follows:

15. The term "specific-use area" means an area determined as an urban management plan in order to use land economically and efficiently and to promote public welfare by restricting the use of land, the use of land, building-to-land ratio (referring to the building-to-land ratio under Article 47 of the Building Act; hereinafter the same shall apply), floor area ratio (referring to the floor area ratio under Article 48 of the Building Act; hereinafter the same shall apply), height, etc. of buildings;

16. The term "specific-use district" means an area determined by an urban management plan in order to promote functions of a specific-use district and promote aesthetic, scenic, safety, etc. by strengthening or relaxing restrictions on the specific-use district for the use of land and building-to-land ratio, floor area ratio, height, etc. of buildings;

17. The term "special-purpose district" means an area determined by an urban management plan to strengthen or relax restrictions on special-purpose areas and special-purpose districts for specific-purpose areas, such as the use of land and building-to-land ratio, floor area ratio, height, etc. of buildings, in order to prevent disorderly spread of urban districts, to promote planned and phased use of land, to comprehensively adjust and manage the use of land;

Article 36 (Designation of Special-Purpose Areas)

(1) The Minister of Construction and Transportation or the Mayor/Do governor shall determine the designation or alteration of specific-use area falling under any of the following subparagraphs by an urban management plan:

1. Urban area: To be designated under the category falling under one of the following items:

(a) Residential area; Areas necessary to protect peaceful dwelling and sound living environment;

(b) Commercial area; Areas necessary for the increase of conveniences for commerce and other businesses;

(c) Industrial area: Area necessary for enhancing conveniences for industries; and

(d) Green area; An area requiring the conservation of green areas in order to protect the natural environment, farmland, and forests, health and sanitation, security, and to prevent the clean spread of cities;

2. Control area; To be designated under the category falling under one of the following items:

(a) Conservation management area: An area that needs conservation for the protection of the natural environment, forest conservation, water pollution prevention, securing green space, conservation of ecosystems, etc., but it is difficult to designate and manage as a natural environment conservation area in consideration of the relationship with the station of surrounding use, etc.;

(b) Production management area: An area requiring management for agriculture, forestry, fishery production, etc., but it is difficult to designate and manage as an agricultural and forest area in consideration of the relationship, etc. with the surrounding special-purpose area;

(c) Planned control area; an area in need of planned and systematic control, which is an area expected to be integrated into an urban area, or intended for restricted utilization and development by taking into account natural environments;

3. Agricultural and forest area;

4. Natural environment conservation areas.

(2) The Minister of Construction and Transportation or the Mayor/Do governor may subdivide and designate again the specific-use areas under each subparagraph of paragraph (1) as the determination of urban management planning under the conditions as prescribed by the Presidential Decree.

Article 37 (Designation of Specific-Use District)

(1) The Minister of Construction and Transportation or a Mayor/Do Governor shall determine any of the following special-purpose districts by an urban management plan:

1. Scenic district: A district required for protecting and creating scenery;

2. Fine view district: District required for maintaining the fine views;

3. Height district: Districts requiring to regulate the minimum limit or maximum limit on the height of buildings, in order to create pleasant environments and to make a high-level utilization of land and its improvements;

4. Fire-prevention district; Districts needed to prevent the danger of fire;

5. Disaster-prevention district; Districts needed to prevent the storm and flood damage, landslide, ground collapse and other disasters;

6. Conservation district: District required for protecting and keeping the cultural properties, major installations and areas of great conservative values culturally and ecologically;

7. Facility protection districts: Districts necessary to protect school facilities, public facilities, ports or airports, to promote the efficiency of business functions, and to ensure the safe operation of aircraft, etc.;

8. Settlement districts: Districts to improve settlements within green areas, control areas, agricultural and forest areas, natural environment conservation areas, restricted development zones or urban natural park areas;

9. Development promotion district: District in need of intensive development and consolidation of the residential function, commercial function, industrial function, distribution and logistics function, tourism and recreation function, etc.;

10. Specific-purpose restricted district: The Gu in need of limiting the location of specific facilities, such as juvenile harmful facilities, etc. for the purpose of protecting the residential function or protecting juveniles, etc.

11. Other districts as prescribed by the Presidential Decree.

(2) The Minister of Construction and Transportation or the Mayor/Do governor may, when it is deemed necessary, again designate or modify the specific use district falling under each subparagraph of paragraph (1) by means of the determination of urban management planning under the conditions as prescribed by

(3) Where it is necessary for regional conditions, a Mayor/Do Governor may determine the name and purpose of a special-purpose district, and matters concerning prohibition and restrictions on construction and other acts, etc. by Municipal Ordinances of the relevant City/Do in accordance with the standards prescribed by Presidential Decree, by determining the designation or alteration of the special-purpose district and the special

Article 38 (Designation of Development Restriction Zones)

(1) In order to prevent any disorderly expansion of cities and to preserve the natural environment surrounding cities in order to ensure a healthy living environment for urban citizens, the Minister of Construction and Transportation may designate development-restricted areas or modify designation of development-restricted areas or urban management planning where it is deemed necessary to restrict development of a security city at the request of the Minister of National Defense.

(2) Matters necessary for designating or changing development restriction zones shall be prescribed separately by other Acts.

Article 38-2 (Designation of Urban Natural Park Zones)

(1) Where the Mayor/Do Governor deems it necessary to restrict the development of mountainous districts with excellent vegetation in an urban area in order to protect the natural environment and scenery of a city and to provide city citizens with a healthy leisure and resting space, he/she may determine the designation of urban natural park areas or the designation of urban natural park areas or the change thereof by an urban management plan.

(2) Necessary matters concerning designating or changing urban natural park areas shall be separately prescribed by other Acts.

Article 39 (Designation of Urbanization-Coordination Zones)

(1) Where the Minister of Construction and Transportation deems it necessary to withhold the urbanization of an urbanization-coordination zone for a specified period, as prescribed by Presidential Decree, in order to prevent any disorderly urbanization of urban areas and their surrounding areas and to promote planned and phased development, he/she may determine designation or alteration outside the urbanization-coordination zone by an urban management plan.

(2) A decision on an urban management plan concerning the designation of the urbanization adjustment zone shall lose its validity on the date following the expiration of the period of reservation on urbanization under paragraph (1). In this case, the Minister of Construction and Transportation shall publicly notify such fact under the conditions as prescribed

Article 40 (Designation of Fishery Resources Protection Zones) The Minister of Construction and Transportation may determine, in person or at the request of the heads of relevant administrative agencies, the designation or alteration of jointly owned names necessary for the protection and fostering of fishery resources and the designation or alteration of a fishery resources protection zone for land adjacent thereto by urban management planning.

Building Act

Article 2 (Definitions)

(2) The uses of buildings under paragraph (1) 2-2 shall be classified as follows, and the detailed uses of buildings shall be prescribed by Presidential Decree:

1. Single houses;

2. Apartment houses;

3. Class I neighborhood living facilities;

4. Class II neighborhood living facilities;

5. Cultural and assembly facilities;

6. Religious facilities;

7. Sales facilities;

8. Transportation facilities;

9. Medical facilities;

10. Educational and research facilities;

11. Facilities for the aged and children;

12. Training facilities;

13. Sports facilities;

14. Business facilities;

15. Lodging facilities;

16. Amusement facilities;

17. Factories;

18. Warehouse facilities;

19. Storage and treatment facilities for hazardous substances;

20. Automobile-related facilities;

21. Animaland plant-related facilities;

22. Excreta and garbage treatment facilities;

23. Correctional and military facilities;

24. Broadcast and communications facilities;

25. Facilities for power generation;

26. Graveyard-related facilities;

27. Sightseeing and resting facilities;

28. The completion of other facilities as prescribed by the Presidential Decree.