To ensure consistency, the Real Estate Transactions Act has rules that real estate companies must follow when displaying property floor sizes on advertisements and in contract documents.
Why does it matter?
Some tax breaks have size restrictions, and these sizes will be based on different methods of measurement. The home loan tax reduction, which allows a borrower an annual tax deduction of 200,000 ~ 400,000 Yen for up to 10 years, requires a minimum inside-wall measurement of 50 sqm. Some banks may also refuse to lend on properties with an inside-wall measurement of less than 50 sqm. The acquisition tax payable upon purchase of real estate is slightly lower for residences with a taxable floor area of between 50 to 240 sqm.
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