The Government’s Select Committee on the Taxation System has decided to extend the fixed asset tax reduction that applies to brand new homes and apartments. The reduced tax benefit will be extended an additional two years. Under this new plan, the annual fixed asset tax on a brand new apartment or home will be halved for the first five years since construction. The tax applies to all new residences, including those purchased to be rented out as an investment.
About annual fixed asset taxes:
If you own property in Japan, you must pay annual fixed asset taxes. The taxes are based on the government value of the land, which is approximately 70% of market value. The government land evaluation is carried out once every 3 years, so rates will vary.
Although rates will vary on each property, here are some examples of annual fixed asset taxes:
– House (1998) on 155.82sqm of land in Setagaya-ku: 138,192 Yen
– House (2005) on 168.64sqm of land in Yokohama: 153,225 Yen
– Apartment (2003) with area of 132.40sqm in Yokohama: 219,292 Yen
Source: The Asahi Shimbun, December 8, 2011.
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