123 Taxpayers File Petition for Constitutional Review of the Comprehensive Real Estate Tax Act in Court

Seoul Administrative Court, Yangjae-dong, Seocho-gu, Seoul.
[Image source=Yonhap News]

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] Taxpayers who filed administrative lawsuits requesting the cancellation of the 2020 Comprehensive Real Estate Holding Tax (종부세) imposition have applied to the court for a constitutional review of the Comprehensive Real Estate Holding Tax Act, which was the basis for the imposition, claiming it violates the Constitution.

The application for a constitutional review is a procedure in which a party involved in a court trial requests the court to refer the constitutional review of a law to the Constitutional Court when the outcome (order) or main reasoning of the judgment may change depending on whether the law violates the Constitution.

If the court deems the party's application valid and refers the constitutional review to the Constitutional Court, the trial of the case will be suspended until the Constitutional Court makes a decision on the constitutionality.

According to the legal community on the 22nd, 123 individuals, including Mr. Kang, who were subject to the 2020 종부세 notice, submitted a petition for constitutional review of the Comprehensive Real Estate Holding Tax Act to the Seoul Administrative Court on the same day.

The legal representatives stated, "When the tax burden for current homeowners is calculated using the tax rates under the revised tax law, it leads to the conclusion that the state confiscates a significant portion of the housing price, and in some cases, the tax amount payable is expected to exceed the real estate price," explaining the reason for applying for the constitutional review.

According to the legal representatives, the number of people subject to the 2020 종부세 notice was 744,000, and the notified tax amount was 4.2687 trillion won, representing a 25% increase in the number of subjects and a 27% increase in the tax amount compared to the previous year.

The legal representatives argued, "Along with the government's real estate policy implementation, housing prices have rather skyrocketed over the past three years," and "the law defines the criteria for tax rates in a broad and ambiguous manner that is not appropriate for the regulatory purpose."

They added, "It treats real estate holders such as single homeowners in designated adjustment areas or those owning two or three or more houses as speculators, stigmatizing and punishing them, which lacks appropriateness as well as legitimacy and rationality."

Mr. Kang and others filed a lawsuit in the administrative court in July to cancel the previous year's 종부세 imposition.

This content was produced with the assistance of AI translation services.