Japan Tax & Accounting provides investors with accounting and tax information about the real estate investment in Japan.

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2. Taxes at the time of Real Estate purchase in Japan – Real Estate Acquisition Tax

2-3 Real Estate Acquisition Tax

This is a prefectural tax paid by person acquiring land or houses.
After registration, tax needs to be paid upon receipt of a Tax Notice (Tax Payment Slip) from the Prefectural Taxation Office until the date designated on the Tax Notice (Tax Payment Slip).
This apply to land or houses acquired through building, extending, exchanging, giving as gift (including gift on owner’s death), except in case of acquired through inheritance or the merger or division of corporations.
There are special tax base for building lots and other land equivalent to building lots.
There are special tax base and reducing measure for hoses and land that satisfy certain conditions.

2.3.1 Tax rates

Land/House Tax base x 3% (Regular rate is 4%. By reducing measure, it is rated to 3% until 31 March, 2015)
Office/Shop Tax base x 4%

2.3.2 Tax base

In principal, the tax base is as same value as the value registered in the fixed assets tax register handled by the municipal government. If you acquire residential land subject to taxation during 1 January, 2006 to 31 March, 2015, the value of the residential land shall be equal to 1/2 of its original value.

2.3.3 Major reducing measures

2.3.3.1 Reducing measures for house

Condition Detail Note
Qualified house Buying or building a new house which is either one of below.

  • House with floor space no more than 240 square meters and no less than 50 square meters
  • Rented apartment, etc. with no more than 240 square meters and no less than 40 square meters per room
1. Reducing measure for qualified new house

  • Deduction of 12,000,000 yen from the appraised value of the house is allowed.
  • Amount of tax = (appraised value -12,000,000 yen) x3%
  • Vacation houses are not included
  • For house with shop, only the residential part are eligible
  • It is also qualified in case of the acquirer is not the resident of the house
2. Reducing measure for qualified long-life quality housing

  • Deduction of 13,000,000 yen from the appraised value of the house is allowed.
  • Amount of tax = (appraised value -13,000,000 yen) x3%
  • Long-life quality house built during the period from 4 June 2009 to 31 March 2016.
  • (Cannot be used in combination with 1. above.)

Existing house Buying a second-hand house (existing house) with condition listed below.

  • House with floor space no more than 240 square meters and no less than 50 square meters
  • Either one of below
  1. Non-fire-proof building which was acquired less than 20 years or fire-proof building which was acquired less than 25 years
  2. House that was built later than 1 January 1982
  3. House built before 31 December, 1981 with proof of satisfaction of the new earthquake resistance standards (The inspection of the proof has to be done two years before acquisition)*1
  4. House that was built after 31 December, 1981 and acquired later than April, 2014, then done the improvement to make it earthquake resistance within less than 6 month and proofed as satisfied new standards for earthquake resistance.
  • Amount below will be deducted based on the period the house was built
    1 January, 1976 – 30 June, 1984: 3,500,000 yen
    1 July, 1984 – 30 June, 1985: 4,200,000 yen
    1 July, 1985 – 31 March, 1989: 4,500,000 yen
    1 April, 1989 – 31 March, 1997: 10,000,000 yen
    1 April, 1997 – : 12,000,000 yen
  • Amount of tax = (Tax base – amount of deduction) x 3%
  • Individual acquirer only
  • Residence of acquirer

*1: Existing house acquired after 1 April, 2013 includes house with defect insurance on traded existing houses

“Real Estate Acquisition tax” will continued to “2.3.3.2 Reducing measures for land”, and “2.3.4 How to apply reducing measure”, then move on to the subject about “Fixed Asset Tax”.

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