Comprehensive Real Estate Holding Tax | Administrative Court Ruling That an Apartment Purchased for Office Use Is Subject to the Comprehensive Real Estate Holding Tax If Residential Living Remains Possible

The plaintiff in this case, A, is the representative of a company engaged in manufacturing and sales. After purchasing the OO Apartment, A registered the apartment as the head office of the corporation and used it as an office.

In the meantime, the Samsung Tax Office imposed approximately 27 million won in comprehensive real estate holding tax and approximately 5.5 million won in special tax for rural development.

In response, A argued that, because the apartment was used as an office and its water and gas consumption was almost nonexistent, it did not constitute housing and was therefore not subject to the comprehensive real estate holding tax. A accordingly filed a lawsuit seeking revocation of the imposition of the comprehensive real estate holding tax and related taxes against the head of the Samsung Tax Office.

The Administrative Court that heard the litigation concerning the comprehensive real estate holding tax did not accept A's argument.

The court found that, although the apartment owned by A was being used for a purpose other than residence, because its residential function was maintained as is, it constituted housing subject to the comprehensive real estate holding tax.

While acknowledging that A did not actually use the apartment for residential purposes, the court found that the apartment's structure, function, facilities, and the like were originally designed for residential use, and that, as of the tax base date, it had a structure in which the members of a household could lead an independent residential life over a long period.

In addition, as to A's argument that ‘the water, gas, and electricity consumption of the apartment was almost nonexistent,’ the court ruled that this resulted merely from A's subjective intent regarding use, and that it could not be said that the residential function of the apartment had been significantly altered or lost.

Accordingly, the court determined that, because this apartment constituted housing subject to the comprehensive real estate holding tax, the Samsung Tax Office's imposition of the comprehensive real estate holding tax was lawful.

We have analyzed the Administrative Court's ruling that, with respect to the comprehensive real estate holding tax, an apartment used for office purposes is subject to the comprehensive real estate holding tax if it maintains its residential function.

As in the case above, when you object to a tax-related disposition, you may file a 🔗tax lawsuit.

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