Court Rejects Real Estate Tax Appeal

The Constitutional Court unanimously rejected an authority dispute claim requested by the 22 boroughs in Seoul, including Gangnam. The 22 boroughs argued that “the National Assembly infringed upon the fiscal rights of local autonomous districts by establishing comprehensive real estate tax laws.”

The authority dispute judgment is based on a policy that the Constitutional Court rule when there is discord between national agencies, between national agencies and local government bodies, and between local government bodies on the existence and boundaries of any right among them.

The Court said in its official report, “The comprehensive real estate tax law was a national issue even before it was established, and because it was publicly executed in January 5 of last year, that’s the day that people started to realize its existence. The request period started then and was valid for 60 days until March 5 of last year, but applicants demanded judgment on July 1 of last year, so the period was terminated.”

Written in Constitutional law, Clause 1, Article 63, says that the dispute over the rights must be filed within 60 days after realizing the reason, and 180 after the reason is executed.

The Court said, “After the establishment of the new taxation law, they knew on June 1, 2005, the point where the law was put into action and the imposition standard for the first property tax, or on July 16, 2005 when the property tax on land and buildings was due, that they were violating our rights,” and refused to accept the claims.

Rejection is decided on when the law is lacking in formality with the endorsement of more than five judges. The Constitutional Court does not judge on whether the law has breached the constitution, so the legal controversy is expected to continue.

The National Assembly passed a tax revision bill that modified the declared value that was applied to residency taxes on January 1, 2005, from 900 million won to 600 million won, and changed the levying method from individual totals to household totals.

Tae-Hoon Lee jefflee@donga.com