When buying a house and after the purchase, various taxes arise. Here's an overview of these taxes and the available exemptions:
Taxes When Buying Real Estate in Japan
1. Stamp Tax:
Applied to contracts related to real estate transactions, such as sales contracts and loan agreements.
Generally, amounts below 50,000 yen are exempt. For amounts over 50,000 yen, rates vary (200 yen for under 1 million yen, 400 yen for 1~2 million yen).
Some contracts may qualify for reduced rates based on specific periods.
2. Real Estate Acquisition Tax:
Levied when acquiring real estate (land or buildings).
Calculation:
・For Buildings
(Fixed Asset Tax Assessment Value of Building−Deduction Amount)×3%
・For Land (Fixed Asset Tax Assessment Value of Land×1/2)×3% Various reductions for residential properties and exemptions for inherited properties under certain conditions.
3. Registration and License Tax:
Applied during the registration process for property ownership.
Ownership Transfer Registration: 2% (reduced rates may apply until March 31, 2023).
Ownership Preservation Registration: 0.4% (0.15% for new builds).
Annual Taxes Charged After Purchasing Real Estate
1. Fixed Asset Tax:
Tax on owned properties, including land and buildings.
Based on the fixed asset tax assessment value set by local authorities, usually at a rate of 1.4%.
Newly built homes may receive reductions for several years, depending on specific criteria.
2. Urban Planning Tax:
Levied on properties within designated urban areas.
Typically up to 0.3%.
Unlike fixed asset tax, there are generally no reductions for new constructions.
Summary
Understanding these taxes and the potential exemptions can help mitigate costs when buying and owning a home. If you have specific questions or need more details on any tax or exemption, feel free to ask!
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