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3. Taxes for Real Estate Owners in Japan – Fixed Asset Tax

3.1 Fixed Asset Tax

Municipal tax which is imposed annually by cities, towns and villages on fixed assets such as land, houses, and depreciable assets.
The tax payer is the one who is listed as registered owner of the fixed asset on municipal property tax ledger on 1 January of relevant year.
There are triennial revaluation of appraised value of land and buildings. The year of 2015 is the revaluation year.
There are special provisions from the tax base and reducing measures for land and houses which satisfy certain conditions.
Tax will be paid by using the tax notice sent from municipality every year, and will be paid in four times installment. (In principle, he time of payments are; April, July, December, and February of the following year.)

3.1.1 Tax Rate

Ratable value of property x 1.4% (Standard tax rate)

Note: The tax rate may differ depending on local government.

3.1.2 Tax Base

In principle, the base of fixed asset tax is equal to the appraised value of the land or houses. The appraised value of property is revised every three years (depreciable asset value will be revised every year). However, if the changes with the registration of land category or rebuilding of the house occurred, the price of land or houses will be revalued at the year. Furthermore, there are cases that the appraised value are not equal to the tax base according to special provisions and reducing measures.

3.1.2.1 Tax Exemption Limit

There are tax exemption for owners who has total tax base of fixed asset in same municipality is less than the amount listed below.
Land: less than 300,000 yen
Hose: less than 200,000 yen
Depreciable asset: less than 1,500,000 yen

3.1.2.2 Taxpayers

An owner of fixed asset as of 1 January each year has to pay the fixed asset tax. “Owner” means the person who is listed as owner on the land/house registration book or the depreciable asset tax ledger.
Even the owner at the present have been changed by transfer or sales and purchase, the person who has registered as an owner on the land/house registration book or the depreciable asset tax ledger will be the taxpayer for the asset if the change of ownership on the registration book or the ledger have not done by as of 1 January.

3.1.3 Information Disclosure Act (came into effect on 1 April, 2003)

3.1.3.1 Notice and Publication of Decision of appraised value of land and houses

The decision of appraised value of land and houses will be made until 31 March (due date) every year and will be published.

3.1.3.2 Inspection of the Property Tax Ledger

The taxpayer, renter of land/house and certain person who is at the position to manage the fixed asset can inspect the ledger any time after the date of publish, and can request for issue of certificate of the ledger.

3.1.3.3 Public Inspection of Land Tax Ledger and House Tax Ledger

The taxpayer of the fixed asset tax for land/house can inspect the land/house tax ledger to compare his/her land/house to other’s in the same cities, towns, and villages. The person who can inspect, and which matters can be inspected on which ledger are prescribed by law as following.

Ledger Inspector Matters can be inspected
Land Tax Ledger Taxpayer of fix asset tax for land Location, Street Number, Land category, Acreage, and Value
House Tax Ledger Taxpayer of fix asset tax for house Location, House Number, House Type, Structure, Floor Space, and Value

Note: It is only possible to inspect the ledger of the same district where the taxpayer’s land/house are located. Other cities, towns, and village’s ledger cannot be inspected even if the property is located near by the border.

3.1.3.4 Period of Public Inspection

From 1 April to 20, or due date of the tax payment, whichever comes later.

3.1.3.5 Appeal for Review

If you have any objection against the determination of property’s value on the ledger, you can appeal for reviewing the value to property assessment review committee from the date of publishing the value until within 60 days after the date of issuance of tax notice.
However, to appeal for review on a year other than the fiscal year of revaluation is limited to change the land category, or to change by special reason such as rebuilding/improving or damage of house.

3.1.3.6 Filing of Objection

If you have any objection against the determination other than the value of property on the ledger (such as certified taxpayer, application of special provisions from the tax base, etc.,), you can appeal against the mayor of city, town or village about the decision to review within 60 days after the date of publishing the value (from the date you noticed the determination).

This article will be continued to “Special provisions for building lots”.

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