Chapter 1: Understanding Local Housing Projects / 1

Section 1 Types of Housing Cooperatives / 1
1.
Local Housing Association / 1
2.
Workplace Housing Cooperative / 1
3.
Remodeling Housing Association / 1

Section 2 Types and Qualifications of Local Housing Cooperative Members / 2
1.
Types of members / 2
2.
Qualifications of Union Members / 2

Section 3 Business Progress Procedures / 4
1.
Establishment of a comprehensive housing plan / 5
2.
Establishment of the Comprehensive Housing Plan / 5
3.
Union establishment approval / 5
4.
Approval of business plan / 6
5.
Selling Request / 8

Section 4 Housing Cooperative Members' Rights Certificates (Rights of Occupancy/Presale Rights, etc.) / 10
1.
Parties involved in housing cooperatives / 10
2.
Member's Certificate of Rights / 10

Section 5: Accounting Audit of Local Housing Cooperatives / 12
1.
Auditing and Reporting Obligations / 12
2.
Audit period / 12
3. Application of the Act on External Audit of Corporations / 14
4.
Reporting of Audit Results / 14
5.
Request for correction of market, etc. / 14

Chapter 2: The Character of Local Housing Cooperatives / 15

Section 1: Personality of the Regional Housing Cooperative Establishment Promotion Committee / 15
1.
Whether it is a legal entity / 15
2.
Corporation with approval from the Director of the Tax Office / 15
3.
Non-incorporated organizations other than those considered corporations / 17
4.
Practical Considerations / 17

Section 2: The Personality of Local Housing Cooperatives / 18
1.
If registered / 18
2.
If not registered / 20

Chapter 3 Local Housing Cooperative Corporation Tax / 23

Section 1 Overview / 23

Section 2: Profits of Local Housing Cooperatives / 24
1.
Scope of Taxable Income of Nonprofit Corporations / 24
2.
Income for each fiscal year / 24
3.
Local Housing Cooperatives' Income for Each Fiscal Year / 24
4.
Revenue Recognition / 25

Section 3: Local Housing Cooperatives' Expenses / 27
1.
General sales-related expenses / 27
2.
Individual deductions related to general sales / 27
3.
Apportionment of Common Expenses for Profitable and Non-Profitable Businesses / 27

Section 4: Key Accounting Procedures for Local Housing Cooperatives / 29
1.
Financial Statement Item / 29
2.
Comprehensive Income Statement Item / 33
1.
By Progress / 35
2.
Case by Indian Standard / 35

Chapter 4 Local Housing Cooperative Income Tax / 37

Section 1 Overview / 37

Section 2 Taxable Income / 37
1.
Exclusion of profit-making businesses from member-sold units / 37
2.
Inclusion of general public distribution portion in profit / 38

Section 3: Distribution of Common Expenses / 44
1.
Distribution of common expenses based on area / 44
2.
Salaries of union members, including union leaders / 44

Section 4: Special Cases Regarding Income Calculation for Joint Businesses / 46
1.
Calculating Income Amount by Joint Venture / 46
2.
Distribution of income by joint venture partner / 46
3.
Income Tax Obligation When Members Change / 49
4.
Whether or not the local housing cooperative, which is a joint venture, is subject to verification of good faith reporting / 49
5.
Reporting and Use Obligations for Business Accounts / 50
6.
Distribution of withheld tax / 51

Chapter 5: Local Housing Cooperative Value-Added Tax / 53

Section 1. Membership Supply / 53
1.
Corresponding to the supply of goods / 53
2.
Not applicable to the supply of goods / 53
3.
National Tax Service Interpretation / 54
4.
Practical Application / 55
5.
Key Case Laws Related to Local Housing Cooperatives / 55

Section 2 General Public Supply / 64
1.
Residential and commercial buildings / 64
2.
Land / 64

Chapter 6: Local Housing Cooperative Acquisition Tax / 66

Section 1: Acquisition Tax General / 66
1.
Acquisition tax / 66

Section 2 Acquisition Tax for Local Housing Projects / 75
1.
Acquisition tax on local housing projects / 75

Chapter 7 Local Housing Cooperative Property Tax / 80

Section 1 General Property Tax / 80
1.
Property tax / 80

Section 2: Property Taxes for Local Housing Projects / 87
1.
Property Tax for Local Housing Projects / 87

Chapter 8 Comprehensive Real Estate Tax for Local Housing Cooperatives / 98

Section 1 General Comprehensive Real Estate Tax / 98
1.
Purpose (Article 1 of the Act) / 98
2.
Definition of Terms (Article 2 of the Act) / 100
3.
Taxable / 102
4.
Tax base date (Article 3 of the Act) / 104
6.
Tax classification and tax amount (Article 5 of the Act) / 108
7.
Fair Market Value Ratio (Enforcement Decree Article 24) / 108
8.
Property Tax Deduction System / 109
9.
Tax Exemption, Reduction, etc. (Article 6 of the Act) / 111

Section 2 Comprehensive Real Estate Tax for Local Housing Projects / 116
1.
Comprehensive Real Estate Tax on Land / 116
2.
Comprehensive Real Estate Tax on Cooperative-Owned Housing / 119
3.
Comprehensive Real Estate Tax on Commercial Land Auxiliary to Cooperatives / 120

Chapter 9 Real Estate-Related Burdens / 121

Section 1: Agricultural Land Conversion Fee (Agricultural Land Act) / 121
1.
Overview / 121
2.
Subject to Imposition / 122
3.
Burden Calculation Standards and Burden Rates / 123
4.
Payment Period / 124
5.
Exemption (Reduction) Target / 125
6.
Refund Regulations (Article 38, Paragraph 5 of the Agricultural Land Act, Article 51 of the Enforcement Decree of the same Act) / 125

Section 2: Alternative Forest Resource Development Costs (Forest Management Act) / 127
1.
Overview / 127
2.
Subject to Imposition / 127
3.
Burden Calculation Standards and Burden Rates / 128
4.
Payment Period / 128
5.
Exemption (Reduction) Target / 128
6.
Refund Regulations (Article 19-2 of the Forest Management Act, Article 25-2 of the Enforcement Decree of the same Act) / 129

Section 3 Forest Restoration Reserve Fund (Forest Management Act) / 130
1.
Overview / 130
2.
Deposit Target / 130
3.
Deposit Calculation Standards and Deposit Rates / 131
4.
Payment Period / 131
5.
Exemption from Deposit Obligation / 132
6.
Refund of restoration costs (Article 43 of the Forest Management Act) / 132

Section 4: Water Supply Contributors' Burden (Waterworks Act) / 133
1.
Overview / 133
2.
Subject to Imposition / 133
3.
Burden Calculation Standards and Burden Rates / 134
4.
Payment Period / 136

Section 5: Sewerage Contributors' Burden (Sewerage Act) / 137
1.
Overview / 137
2.
Subject to Imposition / 137
3.
Burden Calculation Standards and Burden Rates / 138
4.
Payment Period / 139

Section 6 School Land Contribution (Special Act on Securing School Land, etc.) / 140
1.
Overview / 140
2.
Subject to levy / 140
3.
Burden Calculation Standards and Burden Rates / 140
4.
Payment Period / 140
5.
Exemption (Reduction) Target / 141

Section 7 Metropolitan Transportation Facility Charges (Special Act on Metropolitan Transportation Management in Metropolitan Areas) / 142
1.
Overview / 142
2.
Subject to Imposition / 142
3.
Burden Calculation Standards and Burden Rates / 143
4.
Payment Period / 144
5.
Exemption (Reduction) Target / 144

Chapter 10 Development Charges (Development Profit Recovery Act) / 146

1.
Overview / 146
2.
Subject to Imposition / 146
3.
Burden Calculation Standards and Burden Rates / 147
4.
Payment Period / 148
5.
Exemption (Reduction) Target / 149

Appendix 1.
Housing Act, Enforcement Decree of the Housing Act, Enforcement Rules of the Housing Act / 151

Chapter 2 of the Housing Act.
Section 2. Construction of houses, etc.
Housing Cooperatives (Articles 11 to 14-4) / 152
Article 11 (Establishment of Housing Cooperatives, etc.) / 152
Article 11-2 (Agency for Housing Cooperative Business, etc.) / 153
Article 11-3 (Reporting and Public Recruitment of Union Members) / 154
Article 11-4 (Duty to Explain) / 156
Article 11-5 (Compliance Matters Regarding Union Member Recruitment Advertisements, etc.) / 156
Article 11-6 (Withdrawal of Union Membership and Refund of Membership Fees, etc.) / 157
Article 12 (Performance Reporting and Disclosure of Related Data) / 158
Article 13 (Disqualifications of Union Officers, etc.) / 159
Article 14 (Supervision of Housing Cooperatives, etc.) / 160
Article 14-2 (Dissolution of Housing Cooperatives, etc.) / 160
Article 14-3 (Accounting Audit) / 161
Article 14-4 (Construction Guarantee for Housing Cooperative Projects) / 161

Chapter 2 of the Enforcement Decree of the Housing Act.
Section 2. Construction of houses, etc.
Housing Cooperatives (Articles 20 to 26-2) / 163
Article 20 (Approval of Establishment of Housing Cooperatives, etc.) / 163
Article 21 (Qualifications of Union Members) / 166
Article 22 (Replacement, New Membership, etc. of Regional and Workplace Housing Cooperative Members) / 168
Article 23 (Application for Approval of Housing Cooperative Business Plan, etc.) / 169
Article 24 (Reporting the Establishment of a Workplace Housing Cooperative) / 169
Article 24-2 (Requirements for Housing Cooperative Agents) / 170
Article 24-3 (Qualifications for Housing Cooperative Promoters, etc.) / 170
Article 24-4 (Compliance Matters Regarding Union Member Recruitment Advertisements, etc.) / 171
Article 24-5 (Deposit of Membership Fees, etc.) / 171
Article 24-6 (Withdrawal of Application for Housing Cooperative Membership) / 172
Article 24-7 (Payment and Refund of Membership Fees, etc.) / 172
Article 25 (Disclosure of Data) / 173
Article 25-2 (Dissolution of Housing Cooperatives, etc.) / 173
Article 26 (Accounting Audit of Housing Cooperatives) / 174
Article 26-2 (Construction Guarantee) / 175

Chapter 2 of the Enforcement Decree of the Housing Act.
Section 2. Construction of houses, etc.
Housing Cooperatives (Articles 7 to 11-3) / 176
Article 7 (Application for Approval of Establishment of Housing Cooperatives, etc.) / 176
Article 7-2 (Scope of Duties of Agents, etc.) / 177
Article 7-3 (Reporting on Recruitment of Union Members) / 178
Article 7-4 (Public Recruitment of Union Members) / 179
Article 7-5 (Confirmation of Housing Cooperative Membership Agreement Explanation) / 180
Article 8 (Verification of Member Qualifications, etc.) / 180
Article 9 (Additional Recruitment of Local and Workplace Housing Cooperative Members, etc.) / 181
Article 10 (Establishment Report of Workplace Housing Cooperative, etc.) / 182
Article 10-2 (Deposit of Membership Fees, etc.) / 182
Article 10-3 (Withdrawal of Application for Housing Cooperative Membership) / 182
Article 10-4 (Payment and Refund of Membership Fees, etc.) / 183
Article 11 (Performance Reporting and Disclosure of Data) / 183
Article 11-2 (Notification of General Meeting Results) / 184
Article 11-3 (Construction Guarantee) / 184
Appendix 2.
Explanatory Materials for the Regional and Workplace Housing Cooperative System / 187

Chapter 1: Concept and Types of (Regional/Workplace) Housing Cooperatives / 188
1-1.
The Concept and Intention of the Introduction of the Housing Cooperative System / 188
□ Differences between Maintenance Projects and Housing Cooperative Projects / 189
1-2.
Legal Status of Housing Cooperatives: Unincorporated Associations / 189
1-3.
Types of Housing Cooperatives / 189

Chapter 2 Qualifications of Housing Cooperative Members, etc. / 190
2-1.
Union Membership Qualifications / 190
□ Local Housing Association / 190
□ Workplace Housing Cooperative / 191
2-2.
Criteria for Determining Union Membership Qualifications (Basis: Article 21 of the Act, Article 8 of the Enforcement Decree of the same Act (hereinafter referred to as the “Decree”)) / 193
□ Criteria for determining home ownership / 193
□ Criteria for determining qualifications as head of household / 193
2-3.
Union Membership and Rights and Obligations / 197
□ Union Membership (Standard Rules, Article 9) / 197
□ Rights and Obligations of Union Members (Standard Rules, Article 10) / 198
2-4.
Transfer, withdrawal, loss of membership, and expulsion of members / 199
□ Transfer of Membership Status (Standard Rules, Article 11) / 199
□ Withdrawal, loss of qualification, and expulsion of union members (Standard Rules, Article 12) / 200
2-5.
Member Recruitment, Additional Recruitment, and Replacement / 201
□ Member Recruitment / 201
□ Additional recruitment, replacement, and supplementation of union members / 201

Chapter 3: Implementation Procedures, Information Disclosure, and Accounting Audits for Housing Cooperative Projects / 204
3-1.
Overview of the Housing Cooperative Project Implementation Procedure / 204
3-2.
Implementation Method of Housing Cooperative Projects / 204
3-3.
Reporting and Disclosure of Information on Business Progress / 206
3-4.
Housing Association Accounting Audit / 209
Chapter 4: Housing Cooperative Project Stage-by-Stage Implementation Methods / 210
4-1.
Formation of the union's promoters and selection of a business site / 210
4-2.
Preparation of the cooperative regulations and housing cooperative business outline / 212
□ Significance of the Union Rules / 212
□ Writing combination rules using standard rules / 212
□ Preparation of an overview of the housing cooperative project / 213
4-3.
Securing Land Use Rights / 214
4-4.
Preliminary review of district unit plans, etc. / 214
4-5.
Recruiting members / 215
□ Union Member Recruitment Report / 215
□ Union member recruitment notice and advertisement / 220
□ Obligation to explain union membership / 222
□ Union Membership Agreement / 222
4-6.
Housing Cooperative Founding General Meeting / 231
4-7.
Housing cooperative establishment approval / 232
□ Application for approval of establishment of housing cooperative / 232
□ Application for change of housing cooperative: Attach documents proving the change / 235
□ Application for dissolution of housing cooperative: Attach a statement of accounts with the consent of cooperative members / 235
□ Approval of establishment of housing cooperative / 235
4-8.
Securing Land Ownership / 236
4-9.
Recruitment of additional members / 237
4-10.
Agreement with registered business operator (construction company) / 238
4-11.
Business Plan Approval / 239
□ Application for Business Plan Approval (Basis: Article 15 of the Act and Article 16 of the Ordinance) / 239
□ Business Plan Approval (Basis: Article 15 of the Act) / 242
□ Size of cooperative housing / 242
4-12.
Selling Request / 243
4-13.
Priority Housing Supply for Cooperative Members (Building/Unit Allocation) / 244
□ Priority Supply Method for Cooperative Housing / 244
□ Restrictions on resale of regional and workplace cooperative housing / 245
4-14.
Registered Business and Construction Contract / 245
4-15.
Construction and Sales Warranties / 246
4-16.
Groundbreaking / 247
4-17.
General Sale (Based on: Article 3, Paragraph 2, Article 23, Article 28, etc. of the "Rules on Housing Supply") / 247
4-18.
Usage Test / 248
4-19.
Registration of Preservation and Transfer of Ownership / 248
4-20.
Liquidation and Dissolution of Housing Cooperatives / 248
4-21.
Supervision of Housing Cooperatives (Basis: Article 14 of the Act) / 249
4-22.
Housing Cooperative Reporting and Inspection, etc. (Basis: Article 93 of the Act) / 250

Chapter 5: Major System Improvements (2016-2020) / 251
5-1.
2016.
8. 12.
Enforcement System / 251
5-2.
2017.
6. 3.
Enforcement System / 251
5-3.
2020.
7. 24.
Enforcement System / 253
5-4.
2020.
12.
11.
Enforcement System / 255