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3. Taxes for Real Estate Owners in Japan – City Planning Tax

3.2 City Planning Tax

Municipal tax which is levied on land and houses to apply partially to expenses for city planning enterprises and land readjustment.
Land and houses taxable are the one located inside the urbanization promotion area where the planning schemes are in affect.
Tax base for assessment is the same amount of appraised value for fixed asset tax.
Payment will be done by tax notice which will be sent together with the fixed asset tax notice.
Note: If it was not exceeded the fixed asset tax’s tax exemption limit, it will also not be subject to taxation for the city planning tax.

3.2.1 Tax rate

Ratable value of property x 0.3% (maximum tax rate)
Note: The rate may differ depending on local government according to each municipality have authority to decide the tax rate up to 0.3% as maximum.

3.2.2 Tax base

The same base of appraised value for fixed asset tax is the tax base for the city planning tax.
Like fixed asset tax, tax adjustment and reducing measure will be implemented to city planning tax on residential land.
There are some municipality who take measures for tax base for buildings similar to fixed asset tax.

3.2.3 Special provisions for building lots

3.2.3.1 Special provisions for tax base of residential land:

Portion of land for small residence (less than 200 m2): appraised value x 1/3
Portion of land for residence (exceeding 200 m2): appraised value x 2/3

3.2.3.2 Adjustment and Reducing Measures for City Planning Tax for Building Lot:

The adjustment and reducing measures are the same as the one for fixed asset tax.

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