A Study on the Application of Family Business Inheritance Deduction to Multi-Family Housing Management Business

Article 18 of the INHERITANCE TAX AND GIFT TAX ACT (Revised February 6, 2024, Law No. 20194) as amended states, “In the event that the inheritance commences upon the death of a resident or non-resident, KRW 200 million shall be deducted from the taxable value of the inheritance tax.” In the case of “family business”, Article 18(2)(1) of the same law stipulates that “in the case of inheritance commencing upon the death of a resident and it is an inheritance of a family business, an amount equivalent to the value of the inherited property of the family business shall be deducted from the taxable value of the inheritance tax.” This stipulates the “family business inheritance deduction”. However, the ENFORCEMENT DECREE OF THE INHERITANCE TAX AND GIFT TAX ACT does not define the real estate business as a family business inheritance deduction company, nor does it define the “Multi-Family Housing Management Business” under the “MULTI-FAMILY HOUSING MANAGEMENT ACT”, so it is interpreted that the real estate management business does not fall under the category of a company subject to the family business inheritance deduction. If so, the real estate management business does not fall under the category of a company subject to the family business inheritance deduction, and what is the basis for this. In relation to the industrialization of the real estate management business, it will be necessary to examine it. This study comprehensively examines the requirements of companies subject to the family business inheritance deduction under the 「INHERITANCE TAX AND GIFT TAX ACT」, companies under the Korean Standard Industrial Classification and the housing rental management business under the 「SPECIAL ACT ON PRIVATE RENTAL HOUSING」, and presents the grounds for the evaluation of the condominium management business under the 「MULTI-FAMILY HOUSING MANAGEMENT ACT」 as a company subject to the 「INHERITANCE TAX AND GIFT TAX ACT」 family business inheritance deduction. Furthermore, as a legislative proposal, it proposed how to define the family business as an industry eligible for inheritance deduction according to the Korean Standard Industrial Classification of the ENFORCEMENT DECREE OF THE INHERITANCE TAX AND GIFT TAX ACT, and to establish a condominium management business under the “MULTI-FAMILY HOUSING MANAGEMENT ACT” as an industry under the provisions of individual laws.