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Judgment Finds Comprehensive Property Taxation Just

Posted June. 09, 2007 08:17,   


A first judgment finding the imposition of the comprehensive property appropriate was handed down yesterday.

In a case decided in December last year, the court dismissed an appeal questioning the constitutionality of the comprehensive property tax, but this is the first time the imposition of a comprehensive property tax was found appropriate by a court in initial litigation.

Lawyer Jeon Jeong-gu filed a case against the Yeoksam Tax Office requesting Administration Division 4 of the Seoul Administrative Court (chief judge: Min Jung-gi) to revoke a measure to impose a comprehensive property tax of 1,113,750 won. The court delivered the judgment on June 8 against lawyer Jeon. The court also refused to accept an application for a constitutionality judgment filed by him.

Above all, the judge board laid emphasis on the public nature of land and housing. In the judgment text, it explained this, saying, “The argument is true that the comprehensive property tax, imposed on expensive immovable assets, has a discriminating quality when compared to other asset types of the same price, such as bank deposits or stocks. But since land and housing tend to rise steeply in price and to strongly attract speculation, and since the general public has a high dependency on them, imposing regulations only on the immovable assets cannot be seen as contradicting the principle of equality.”

The judge elaborated that “land and housing, from the perspective of social functions or of the national economy, cannot be put into the same category with other asset types and demand a stronger reflection of the common good.”

Regarding Jeon’s argument that, “The comprehensive property tax is an inappropriate tax imposed on unachieved profits,” the court said, “The comprehensive property tax, unlike the property tax, is imposed according to upward and downward changes in prices. It is not taxation upon unachieved profits since it is imposed when prices surpass a certain level regardless of price fluctuations.”

In addition, regarding the argument that the comprehensive property tax is a double tax on property tax payers, the court made it clear that “the comprehensive property tax cannot be seen as double taxation since it is a national tax imposed to improve the equity of the tax burden and the stability of immovable asset prices, and differs from the property tax, which is a regional tax in terms of type, aim of enforcement, and target of taxation.”