Real Estate Taxation Summary

ACQUISITION

1. Stamp Duty
The amount of stamp duty payable is dependent on the property price listed on the Purchase & Sales Agreement.

Property Price Stamp Duty Reduced Amount after relief
Greater than JPY 5 mil, less than JPY 10 mil 10,000 JPY 5,000 JPY
Greater than JPY 10 mil, less than JPY 50 mil 20,000 JPY 10,000 JPY
Greater than JPY 50 mil, less than JPY 100 mil 60,000 JPY 30,000 JPY
Greater than JPY 100 mil, less than JPY 500 mil 100,000 JPY 60,000 JPY
Greater than JPY 500 mil, less than JPY 1 bil 200,000 JPY 160,000 JPY
Greater than JPY 1 bil, less than JPY 5 bil 400,000 JPY 320,000 JPY
Greater than JPY 5 bil 600,000 JPY 480,000 JPY

2. Registration Tax
Calculation: estimated value of fixed asset x tax rate

The estimated value of fixed assets within Japan is valued by the government once every 3 years.
Registration tax is payable upon acquisition of either land or building.


Registration of land ownership: 2.0% (tax relief deduction of 0.5% in effect until 31 March, 2015).
*The tax rate is not dependent on the Land Use Zone and is a flat rate that applies across all Land Use Zone categories.


Registration building ownership: 2.0% (tax relief deduction for buy-to-live owners of 1.7% in effect until 31 March, 2015).
*The tax rate is not dependent on the Land Use Zone and is a flat rate that applies across all Land Use Zone categories.


Registration of Mortgage: 0.4% (tax relief deduction for buy-to-live owners of 0.3% in effect until 31 March, 2015).
*The tax rate is not dependent on the Land Use Zone and is a flat rate that applies across all Land Use Zone categories.


Conditions for Tax Relief:
1. Registration of ownership must be completed by 31 March, 2015.
2. The property’s GFA should be greater than 50 sqm.
3. The new owner must reside in the property.
4. Defined as a fireproof structure under the Building Standards Law, and constructed within the last 25 years.


3. Real Estate Acquisition Tax
Calculation: estimated value of fixed asset x tax rate (until 31 March, 2015)

Land: 3.0%
Building (residence): 3.0%
Building (non-residence): 4.0%
* A tax relief deduction is applicable for acquisition of residential Land Use Zones. The estimated value of the fixed asset is halved


4. Consumption Tax
Building: 8.0%
Land: 0.0%
* From 1 April, 2017, it will rise from 8.0% to 10.0%.

HOLDING PERIOD

1. Fixed Asset Tax
Calculation: estimated fixed asset price x 1.4% (average tax rate)
The upper limit of the tax rate is 2.1% as enacted by the respective municipality.

Fixed Asset Price:
One-sixth of the land area is taxable for areas less than 200 sqm.
One third of the land area is taxable for areas greater than 200 sqm.

One-half of the value of the estimated fixed asset price is deducted from the taxable amount for a period of 5 years following acquisition of a building constructed within the past year and greater than 50 sqm, but less than 280 sqm in area.


2. City Planning Tax
Calculation: standard taxable value x 0.3% (average tax rate)
The upper limit of the tax rate is 0.3% as enacted by the respective municipality.

The standard taxable value of the city planning tax is calculated based on the tax valuation of fixed assets.

Residential property less than 200 sqm: one third of the standard taxable value.
Residential property greater than 200 sqm: two-thirds of the standard taxable value.

DISPOSAL

1. Capital Gains
When a capital gain is generated:
a) Short-term capital gains (less than 5 years): 39% (income tax: 30%, resident’s tax 9%).
b) Long-term capital gains (equal to or greater than 5 years): 20% (income tax: 15%, resident’s tax: 5%).
* Holding period calculated from January 1.


2. Registration Tax
For mortgage settlement: 1,000 JPY per property.


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Each of us investment team members are expert professionals at property investment advisory, with an acquired know-how of Japanese property investment. We are more than happy to support you by helping you develop your ideas about the properties in the pursuit of your goals. Also, our multinational team welcomes any inquires in English and can provide additional support for speakers of Mandarin and Bahasa Melayu.