Japan’s National Tax Agency (NTA) has decided to revise the rosenka land tax valuations downwards by 4% in three districts in Osaka to reflect the drop in land prices. This is the first time outside of a major disaster that the values have been revised since the system was introduced in 1955. Osaka, which has been hit hard by the tourism downtown, is the only city in Japan to receive this special adjustment.
The rosenka land values are announced in July each year and are based on a valuation date of January 1. That means the data from 2020 did not take into account any impact that the coronavirus pandemic and foreign travel restrictions may have since had on the property market.
Back in June 2020, the NTA had started looking into these impacts. In October they announced that land values had not fallen enough to warrant a revision, but have changed their standpoint after further investigation has shown some steep falls in Osaka land values.
Between January and September 2020, land values in Shinsaibashi-Suji 2 Chome, Soemoncho, and Dotombori 1 Chome had dropped by a staggering 23%. These shopping and entertainment districts are highly dependent on tourist spending and have suffered from the prolonged pandemic. It is worth noting that Shinsaibashi-Shuji 2 Chome’s rosenka land values are still up 313% from 2015, while koji-chika government assessed land values climbed 228% over the same period, jumping by as much as 45% in 2016 and 33% in 2017.
Several other districts in Osaka and Nagoya have seen land values fall by over 15% in 2020, with the NTA considering additional revisions depending on data from an October to December survey.
Rosenka land values are said to represent somewhere around 80% of the market value, although that ratio can vary. If the market value of land has fallen by over 20%, the tax value may end up being higher than what the land could theoretically be sold for, putting an unfair burden on taxpayers.
NHK, January 26, 2021.
The Yomiuri Shimbun, January 26, 2021.
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