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

3.1.4 Special provisions for building lots

3.1.4.1 Special provisions for tax base of residential land

The tax base of residential land is calculated as shown below.

Portion of land for small residence (less than 200 m2): appraised value x 1/6
Portion of land for residence (exceeding 200 m2): appraised value x 1/3
    Note: Lands satisfy the requirement for special provisions are;

  • Residential land which already has residential house where someone living at that moment is built on top of it. Therefore, the portion of land which will be considered are limited to 10 times size of the house’s floor space.
  • If an apartment house combined with a residential house was built on the land, the portion of land multiplied the rates listed below will be the subject to the special provisions.
House Proportion of residential part in the house’s floor space Rate
Fireproof-house with 5 floors or higher Bigger than 1/4 to smaller than 1/2 0.5
Bigger than 1/2 to smaller than 3/4 0.75
Bigger than 3/4 1.0
Others Bigger than 1/4 to smaller than 1/2 0.5
Bigger than 1/2 1.0
  • Apartment house with rooms smaller than 200 m2 will be regarded as land for small residence.

3.1.4.2 Adjustment and Reducing Measures for Fixed Asset Tax for Building Lot

Division of tax burden level Tax base
A 100% or more Regular tax base = Appraised value of this year x 1/6 (or 1/3)
B Less than 100% Tax base = Tax base for the previous year + Regular tax base x 5%
However,

  • If the tax base is bigger than the Regular tax base x 100%: the highest limit is Regular tax base x 100%
  • If the tax base is smaller than the Regular tax base x 20%: the lowest limit is Regular tax base x 20%
Tax burden level of building lot = (Tax base for the previous year / Appraised value for relevant year x special provision ratio (1/6 or 1/3)) x 100%

3.1.5 Special Provision for New houses

There are reduction of tax for new houses which satisfy the conditions on the tables following.

Reduction Half of tax for less than 102 m2 area of the floor
Period of reduction 3 years: No condition for structure nor number of stories
5 years: Fireproof or semi-fireproof structure with 3 stories or more
Conditions More than half area from total floor space of the house is used as residence.
Residential space should be larger than 50 m2 to smaller than 280 m2 (If it is apartment house, the each tenant room should be larger than 40 m2 to smaller than 280 m2).

Notes:
This provision will be implemented for houses build until 31 March, 2016.
If you build a house that qualifies to certain standard for certified long-life quality housing from 4 June, 2009 to 31 March, 2016, the period of reduction will be extended.

  • Buildings other than medium-to-high-rise fireproof buildings: extended to 5 years from 3 years
  • Medium-to-high-rise fireproof buildings: extended to 7 years from 5 years

However, it is necessary to declare by turning certain documents by 31 January of next year of building the house.

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