The court ruled that the members of the cooperative, who received two small flats instead of one large flat due to the reconstruction of apartments, were justified in severely imposing a comprehensive real estate (seed tax) and a special rural tax.

The Seoul Administrative Court's Administrative Second Division (Chief Judge Shin Myung-hee) ruled that 1 people, including Mr. A, a member of an apartment reconstruction association in Seoul, lost a lawsuit against the heads of 2 tax offices nationwide seeking cancellation of the imposition of the end tax, etc.

In accordance with the old Urban and Residential Environment Improvement Act, Mr. A and other members of the cooperative were able to receive two houses, including one large house or a small house of 2 square meters or less, within the price of the existing house or the area of the residence.

The plaintiffs chose to sell two small houses.

At that time, small houses were considered as single-family dwellings if they met the requirements under the special law on private rental housing.

However, the system was abolished in August 86.

The Seed Tax Act required "three-homers or two-homers in areas subject to adjustment such as Seoul" to be subject to heavy taxation, and the apartment was in the area subject to adjustment.

In November 13, each tax office imposed a total seed tax of 1.60 billion won and a total of 2 million won in rural special tax on Mr. A and others.

The members of the cooperative filed a lawsuit to cancel the imposition, saying, "Although first-generation and second-generation homeowners can be taxed on a sliding scale depending on the circumstances of acquisition, the holding period, and the ability to pay taxes, indiscriminately applying a high progressive tax rate just because they are within the area subject to adjustment violates property rights contrary to the principle of excessive prohibition."

They argued that the situation is substantially the same as the members of the cooperative who received one large house, but that the heavy imposition of the end-of-life tax only on the members of the two-house cooperative would be contrary to tax egalitarianism.

However, the court did not accept all the arguments of Mr. A and other union members.

The court reasoned that "even if it can be said that the period of ownership of a house for a member of a two-house cooperative and a member of a one-house cooperative is the same, the economic substance cannot be considered to be the same."

In addition, he said, "The sale of two houses is based on the choice of the plaintiffs," and "Treating two houses as one house may result in excessive preferential treatment of the plaintiffs and may be contrary to tax egalitarianism."

He added, "The fact that it was possible to resell a house other than a small house does not mean that the way to become a single homeowner has been blocked."

In addition, the court held that "it cannot be said that the plaintiffs' ownership of two homes, including a small house, was not for any speculative purpose" and that "the economic substance of the plaintiffs is not the same as that of those who chose one."