An aerial view shows apartments in Seoul, July 14. Yonhap

A local court on Thursday ruled in favor of the comprehensive real estate holding tax, a controversial additional tax burden imposed on expensive house owners.

The Seoul Administrative Court rejected two lawsuits filed separately by two Seoul residents demanding that comprehensive real estate holding taxes levied on their respective apartment houses in southern Seoul be nullified for reasons of double taxation and possible legal breaches.

The court also dismissed the plaintiffs' requests that an application be filed with the Constitutional Court for a constitutionality review of the comprehensive real estate holding tax.

The plaintiffs launched their lawsuits against regional tax offices in March last year after they were slapped with about 10 million won ($7,630) and some 2 million won, respectively, in comprehensive real estate taxes the previous year and their appeals to the National Tax Tribunal were rejected.

The comprehensive real estate holding tax is a national tax levied annually on apartments whose government-assessed value exceeds 1.1 billion won. The tax, imposed separately from property taxes collected by local governments, also applies to individuals who own multiple apartments with a combined appraisal value exceeding 600 million won. The government plans to raise the tax base for the comprehensive real estate tax to 1.4 billion won for single home owners this year.

The plaintiffs argued that the imposition of comprehensive real estate holding taxes breaches the principle of legality of taxation and constitutes dual taxation, as they are levied on the same property already subject to property and capital gains taxes. They also insisted that the comprehensive taxes are a violation of egalitarianism by discriminating against people who own real estate.

But the court refused to accept their arguments, saying that a house is not a simple investment asset but an asset closely related to housing stability and thus the imposition of comprehensive real estate taxes cannot be seen as unreasonable.

Last year, some 480,000 taxpayers in Seoul and around 238,000 in Gyeonggi Province, which surrounds the capital, were hit with the annual comprehensive property holding taxes. (Yonhap)