The Constitutional Court has ruled that the former Inheritance Tax and Gift Tax Act, which barred daughters-in-law or sons-in-law who lived with their deceased spouse's parents after their spouse's death from receiving the "inherited housing tax deduction," is constitutional.

According to the legal community, the Constitutional Court issued a unanimous ruling of constitutionality on September 17 in a constitutional complaint filed by a person identified as A regarding a specific provision of Article 23-2, Paragraph 1, Item 1 of the former Inheritance Tax and Gift Tax Act.

A had been living with her husband and her father-in-law at the father-in-law's house since 1998.

After her husband passed away in 2014, A continued to live in the same house. When her father-in-law passed away in 2017, she inherited the house through an agreement on the division of inherited property.

A filed and paid her inheritance taxes by applying the inherited housing tax deduction, but tax authorities notified her of an increased inheritance tax assessment, stating that she did not qualify for the deduction.

Article 23-2, Paragraph 1, Item 1 of the former Inheritance Tax and Gift Tax Act stipulated that a certain amount be deducted from the taxable value of the inheritance "when an heir who has lived in the same house with the decedent for 10 years or more inherits that house."

Daughters-in-law or sons-in-law who lived with their spouse's parents after their spouse's death, like A, were thus excluded from the tax deduction eligibility.

In response, A filed a lawsuit seeking the revocation of the tax imposition. During her appeal, she applied for a constitutional review petition, arguing that the relevant tax provision was unconstitutional. After the request was dismissed, she filed a direct constitutional complaint in December 2021.

Following approximately five years of review, the Constitutional Court ruled it constitutional, stating that it "does not violate the principle of tax equality."

The Constitutional Court explained, "The inherited housing tax deduction is a system that grants tax benefits to heirs who meet certain requirements to protect the continuity and stability of their residential life. It cannot be seen that its scope must necessarily coincide with the general scope of heirs stipulated in the Civil Act or the Inheritance Tax and Gift Tax Act."

(File Photo: Yonhap News)