Temporary two-house exemption limited to one-house households

1. 01Question

   Does Article 155(1)(i) of the former Enforcement Decree of the Income Tax Act, which exempts a household that has temporarily become a two-house household, apply where a household already owning two houses in Korea acquired a new house, became a three-house household, and then disposed of one of the earlier houses to become a two-house household again?

2. 02Holding

   It does not. Reading the words, structure and purpose of Article 89(1)(iii) of the former Income Tax Act and Article 154(1), (11) and Article 155(1)(i) of its former Enforcement Decree in light of the principle of tax legality, a tax provision must be read according to its text unless special circumstances exist, and it may not be extended or applied by analogy without a reasonable ground. Article 155(1)(i) therefore presupposes a household that owned one house and so became a two-house household when it acquired a new one, and the present taxpayers' household fell outside it.

   Summary of the holding, verbatim

   따라서 국내에 2주택을 소유한 1세대가 신규 주택을 취득함으로써 3주택이 되었다가 종전의 주택 중 1주택을 처분하여 2주택이 된 경우는 구 소득세법 시행령 제155조 제1항 제1호에 따른 양도소득세 비과세 대상에 해당하지 않는다.

   Unofficial English translation

   Accordingly, a case where a household that owns two houses in Korea becomes an owner of three houses by acquiring a new house, and then comes to own two houses by disposing of one of the previously owned houses, does not fall within the scope of the exemption from income tax on capital gains under former Article 155 (1) 1 of the Enforcement Decree of the Income Tax Act.

3. 03Disposition

   Dismissed Stated in the decision

   상고를 모두 기각한다. 상고비용은 원고들이 부담한다.

   Unofficial English translation

   All appeals are dismissed. The appeal costs shall be borne by the plaintiffs.

4. 04Form of the test

   Elements stated Stated in the decision

   구 소득세법 시행령 제155조 제1항 제1호는 국내에 1주택을 소유한 1세대가 신규 주택을 취득함으로써 일시적으로 2주택이 된 경우를 전제로 한 규정으로 보아야 한다.

   Unofficial English translation

   Former Article 155 (1) 1 of the Enforcement Decree of the Income Tax Act must be regarded as a provision premised on a case where one household owning one house in Korea temporarily comes to own two houses by acquiring a new house.

5. 05Factors

   • 과세요건이거나 비과세요건 또는 조세감면요건을 막론하고 조세법규의 해석은 특별한 사정이 없는 한 법문대로 해석할 것이고
   • 합리적 이유 없이 확장해석하거나 유추해석하는 것은 허용되지 아니하는 점
   • 구 소득세법 시행령 제155조 제1항 제1호는 국내에 1주택을 소유한 1세대가 신규 주택을 취득함으로써 일시적으로 2주택이 된 경우를 전제로 한 규정으로 보아야 한다
   • 국내에 2주택을 소유한 1세대가 신규 주택을 취득함으로써 3주택이 되었다가 종전의 주택 중 1주택을 처분하여 2주택이 된 경우는

   Unofficial English translation

   • Whether a tax statute concerns requirements for taxation, requirements for non-taxation, or requirements for tax reduction or exemption, a tax statute must be interpreted in accordance with its text unless there are special circumstances, and

   • an extensive interpretation or an analogous interpretation without reasonable grounds is not permitted;

   • former Article 155 (1) 1 of the Enforcement Decree of the Income Tax Act must be regarded as a provision premised on a case where a household owning one house in Korea temporarily comes to own two houses by acquiring a new house;

   • in a case where a household that owns two houses in Korea becomes an owner of three houses by acquiring a new house, and then comes to own two houses by disposing of one of the previously owned houses,

6. 06Relation to precedent

   Follows earlier decisions Stated in the decision

   대법원 2010. 1. 14. 선고 2007두26544 판결(공2010상, 357)

   Unofficial English translation

   Supreme Court Decision 2007Du26544 decided January 14, 2010 (Gong 2010 Sang, 357)

   Decisions referred to

   대법원 2010. 1. 14. 선고 2007두26544 판결(공2010상, 357)

7. 07Burden of proof

   Not addressed Not in the decision

8. 08Open question and revisit condition

   If a household that did own one house before the new acquisition claims that the date from which the holding period is counted breached the principle of protection of legitimate expectations, would the Supreme Court uphold that claim?

   A later decision that decides the protection of legitimate expectations argument on the holding-period start date, which this judgment left undecided, would require this entry to be read again. So would an amendment to Article 155(1) of the Enforcement Decree, now reading as the current provision, or to Article 89(1)(iii) of the Income Tax Act, which was amended by Act No. 18578 of 8 December 2021.

Read 2026-10-25 · Cross-read 2026-10-25. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.

Every entry is published only after all quotes have been matched character by character against the official text, and audited by an independent second reading from a different model family across all eight axes. Both agreed axes and text-grounded interpretive divergences are recorded openly. The ledger is a research record, not an assessment of the court or advice on any matter.