Court: "After generation separation, father and son living together are one generation; multi-home capital gains tax is justified"

[Asia Economy Reporter Kim Daehyun] A family that lived in the same house despite officially separating households filed a lawsuit to cancel the capital gains tax imposed due to the combined ownership of houses, but the court did not accept it.

According to the legal community on the 15th, the Seoul Administrative Court Administrative Division 2 (Presiding Judge Shin Myunghui) recently ruled against the plaintiff in the first trial of the lawsuit filed by Mr. A against the Seocho Tax Office to cancel the capital gains tax imposition.

Previously, Mr. A purchased an apartment in Seocho-gu, Seoul in 2012. In 2014, he rented a nearby house and lived there with his son.

The son purchased two officetels under his name from 2015 to 2018. In December 2018, he registered his residence at one of the officetels he had purchased.

Mr. A sold the Seocho-gu apartment in March 2019 and, believing that he was a 'single household single homeowner' after separating households from his son, paid about 190 million KRW in capital gains tax.

However, the Seoul Regional Tax Office regarded Mr. A as a 'single household owning three houses' and notified him to pay about 800 million KRW. This was because Mr. A lived in the same house as his son when selling the apartment, thus constituting the same household as his son who owned two officetels.

Mr. A filed an administrative lawsuit, arguing that "the bedroom and bathroom were separated, so each had an independent living space."

The first trial court ruled, "At the time Mr. A sold the apartment, he lived with his son and formed one household," and found the tax authority's decision to be correct.

The court pointed out, "The house in question has a single-floor structure where the entrance, living room, and kitchen had to be shared."

Although it was acknowledged that the son paid property taxes for the officetels directly or sent living expenses to Mr. A, the court noted, "There is no confirmed agreement on the method of settling joint living expenses, and the settlement details are not clearly distinguished."

Seoul Administrative Court, Seocho-gu, Seoul.

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