Annual property taxes won’t increase next year

The government plans to keep annual property taxes (kotei-shisanzei) for the 2021 year at the same level as those in 2020. This means property owners of commercial and residential land that had seen tax valuations increase just prior to the coronavirus, won’t be stuck with a higher tax bill in 2021.

It is expected that this proposal will be included in December 10’s tax reform. 

Annual fixed asset and city taxes (property taxes) represent up to 40% of a city’s tax revenue. The leading Liberal Democratic Party had originally only planned to provide tax relief for commercial land, but the Komeito party pushed for residential land to be included as well to provide some support for households. 

Land that has dropped in value will see the lower amount reflected in next year’s tax bill.

Property taxes are based on the chika-koji appraised land prices which are carried out by the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) on January 1. The taxes are revised every three years. 2021 is one of those revision years, and would normally use the valuation as of January 1, 2020 as the base for calculating property taxes.

As of January 1, 2020, nationwide chika-koji land prices increased by 1.4%. Other regional areas (excluding Sapporo, Sendai, Hiroshima, and Fukuoka) saw land prices increase for the first time since 1992, thanks to strong foreign tourist growth in recent years. Niseko saw some locations increase by 44 ~ 57%. Meanwhile, Standard Land Prices, which are based on a valuation point of July 1, dropped for the first time in three years as the impacts of the coronavirus pandemic began to appear. Over 60% of locations nationwide saw values fall, while 21% saw them increase. A site in Toranomon saw commercial land prices increase by 9.1% due to major redevelopment projects in the area, while Shinjuku’s Kabukicho bar neighborhood saw prices drop 5% as patrons shun the neighborhood during the pandemic. 

Sources:
Kyodo, December 7, 2020.
NHK, December 7, 2020.

 2,134 total views,  2 views today