13-year home loan tax deduction deadline is November 30

With the deadline to apply for the 13-year home loan income tax deduction coming this November, should buyers rush in to purchase or wait to see if it is extended? This scheme allows homebuyers to deduct a percentage of their home loan balance from their income taxes each year for 10 ~ 13 years (the 3-year extension is the one with the looming deadline).

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Withholding tax when the seller is a non-resident

This information applies to:
  • Sellers who are non-residents (eg. foreigners living abroad and Japanese citizens living abroad).
  • Buyers, both local and overseas residents, who are buying real estate in Japan from a non-resident.

If the seller of Japanese real estate is a non-resident, depending on the situation, the buyer must withhold 10.21% of the sale price and pay it to the tax office, with the remaining 89.79% paid to the seller. The buyer is responsible for paying the 10.21% to the tax office by the 10th of the month following the transaction.

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Tax breaks and better home loan rates to boost Japan’s second-hand home market

Journal Standard Renoveru 2
A renovated apartment in Kawasaki City by Renoveru (a collaboration between Journal Standard Furniture and ACME).

As part of a plan to support and boost the market for used homes, the Japanese government is considering introducing measures to encourage lower interest rates on mortgages that include a component for renovations as well as tax benefits for buyers of older homes.

Although there is growing demand from consumers for relatively cheaper existing homes, more than half require some form of work such as earthquake-retrofitting or upgrades to make them barrier-free for older occupants. It is hoped that easier financing will encourage more consumers to consider older homes and reduce the number of vacant homes across the country.

Expanding the Flat 35 Home Loan

The Japan Housing Finance Agency’s ‘Flat 35’ home loan offers interest rates from as low as 1.69%. Although the loan can be used for both new and old properties, it may soon be expanded to provide additional financing for renovation costs at the time of purchase.

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Annual real estate taxes to increase in 2015

Home owners are likely to see their annual fixed asset and city taxes increase in 2015. The Ministry of Internal Affairs and Communications has decided that residential buildings will be valued at a higher rate next year to account to reflect the recent increase in construction and labour costs. This will be the first increase in the taxable value since 2009.

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Toshima-ku to extend tax on studio apartments

Toshima-ku in Tokyo announced that they will extend the special tax on builders of studio or ‘one-room’ apartments for another five years.

The tax applies to buildings with 9 or more apartments that are less than 30 sqm (323 sqft) in size. A construction company must pay a tax of 500,000 Yen on each studio apartment within two months of the commencement of construction.

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