Avoiding consumption tax increase too late for some
It may already be too late for some buyers looking to build their own home before the planned consumption tax increase next year. A last minute rush by buyers nationwide and a shortage in land and building materials means that some buyers will miss out on the current 5% tax rate.
A clause in construction contracts states that 'if the contract was signed at least 6 months prior to an increase in consumption tax, the tax rate applied at the time of hand-over will be the rate in effect at the time the contract was signed'. This means buyers must have their construction contracts signed before the end of September 2013 in order to lock-in the 5% consumption tax rate, otherwise they may be subject to the 8% rate which is scheduled to kick in on April 1, 2014.Read more