Seoul Samsung Tax Office Imposes 33 Million Won Fine, Lawsuit Filed
Court: "Originally Residential, Should Be Considered a House"
The court has ruled that imposing comprehensive real estate tax (종부세) on a Gangnam apartment used as an office rather than for residential purposes is lawful.
According to the legal community on the 21st, the Seoul Administrative Court, Administrative Division 5 (Presiding Judge Kim Sun-yeol) recently ruled against Mr. A in a lawsuit seeking to cancel the imposition of comprehensive real estate tax filed against the head of the Seoul Samsung Tax Office.
In April 2016, Mr. A purchased an apartment in Gangnam-gu, Seoul, registered it as the head office of the corporation he represents, and used it as an office. In November 2021, the Samsung Tax Office imposed comprehensive real estate tax and special rural development tax amounting to about 33 million KRW on Mr. A. Mr. A filed an administrative lawsuit, arguing that since he used the apartment as an office, it did not qualify as a residence and thus was not subject to the comprehensive real estate tax.
However, the court judged that the apartment owned by Mr. A qualifies as a residence subject to the comprehensive real estate tax. The apartment remained registered as a residential address after Mr. A purchased it, and immediately after the sale, it was registered as the residence of another person. Based on this, the court held that even if the apartment was temporarily used as an office, it is still a residence that can be used for residential purposes at any time.
The court cited a precedent from the Supreme Court as the basis for this judgment. The precedent states, "Even if a building is temporarily used for purposes other than residence, if its structure, function, or facilities are originally suitable for residential use and the residential function is maintained and managed so that the owner or a third party can use it as a residence at any time, it is reasonable to regard it as a residence."
The court explained the reason for ruling against the plaintiff, stating, "Even if it was temporarily used as an office, the structure, function, and facilities of the apartment were originally suitable for residential use," and "The residential function was maintained and managed, and as of the tax imposition date, it still had a structure that allowed the household members to live independently for a long period." The court added, "The fact that gas and water usage in the apartment was minimal does not justify evaluating that the apartment has changed to the extent that it is difficult to restore it as a residence."
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