Housing Taxes: Real Estate Acquisition Tax 1

Real Estate Acquisition Tax

Real estate acquisition tax is a tax paid when real estate is acquired. In principle, the tax amount is calculated by multiplying the assessed value of fixed property by a tax rate of 4%. In the case of a newly constructed building that has not yet been assessed for property tax, the value of the building is calculated based on the standards for calculating the value of fixed property by the prefectural governor. The principle method of determining the tax amount is as follows.

• Tax amount = assessed taxable value of fixed property (tax base) x tax rate

Special Tax Rate Reduction for Land and Housing Acquisitions

The tax rate applicable to the acquisition of land and housing is subject to a special tax rate of 3% until March 31, 2024.

≪Reduced tax rate on land≫

Eligible property　 ・・・　Land and housing
Basic tax rate 　・・・　4.0%
​Until March 31, 2024　・・・　3.0%

Special Taxation Standards for Residential Land and Land Whose Assessed Value Is Determined on the Basis of Residential Land

If residential land is acquired by March 31, 2024, the tax base for residential land will be reduced by one-half.

≪Special provisions for tax base on acquisition of certain houses≫

For houses that meet the requirements shown in the table below, the amount shown in the "Deduction Amount" section will be deducted from the assessed taxable value:  tax base = assessed taxable value - deduction amount

Types of houses 
1. New housing (Note 1)
Requirement(s): Floor area of 50 ㎡ or more but less than 240 ㎡.
(40 ㎡ to 240 ㎡ or more for rental housing other than single-family houses)
Amount deducted: 12 million yen
(13 million yen for certified excellent long-term housing, but only until March 31, 2024)

2. Existing (used) housing (Note 2 & 3)
Requirement(s):
(1) Floor area of 50 ㎡ to 240 ㎡ or more
(2) To be used for one's own residence
(3) One of the following is applicable

• Built on or after January 1, 1982
• Certified by an architect within two years prior to the date of acquisition as conforming to the earthquake safety standards stipulated in the Building Standards Law (Including homes sold within 2 years of purchasing Existing Home Sales Defects Insurance)

Date built: July 1, 1954 to December 31, 1963　⇒　Amount deducted: 1 million yen
Date built: January 1, 1964 to December 31, 1972　⇒　Amount deducted: 1.5 million yen
Date built: January 1, 1973 to December 31, 1975　⇒　Amount deducted: 2.3million yen
Date built: January 1, 1976 to June 30, 1981　⇒　Amount deducted: 3.5million yen
Date built: July 1, 1981 to June 30, 1985　⇒　Amount deducted: 4.2 million yen
Date built: July 1, 1985 to March 31, 1989　⇒　Amount deducted: 4.5 million yen
Date built: April 1, 1989 to March 31, 1997　⇒　Amount deducted: 10 million yen
Date built: On and after April 1, 1997    ⇒　Amount deducted: 12 million yen

(Note 1) Taxation on residential high-rise buildings (tower condominiums, etc. exceeding 60 meters in height)

1. In the case of acquiring the exclusive use portion (for residential use) of a building such as a tower condominium with a height exceeding 60 meters in which residential units are located on more than one floor, the real estate acquisition tax - which is imposed by deeming the acquisition of a house with a value equivalent to the amount obtained by proportionally dividing the assessed value of the building by the floor area ratio of the exclusive area - is corrected by the "exclusive floor area correction rate by floor area" to reflect the trend of changes in the transaction unit price per floor area due to differences in the floor area of the exclusive area by the floor level where the units are located.
2. Eligible tower condominiums are new residential high-rise buildings taxable on and after April 2018.
3. The correction rate for exclusive floor area by floor level is 100 + 10/39 x (N-1) for the number of N floors.

(Note 2) Special exception for reduction for acquisition of existing Houses nonconforming to seismic standards

1. If you acquire an existing (used) house that does not conform to the earthquake resistance standards, make improvements to it within 6 months of acquisition, and move into it after receiving certification that it conforms to the earthquake resistance standards, under the "Special Exception for Tax Base on Certain Housing Acquisitions" for existing (used) housing, the deductible amount determined by the date built will be reduced from the tax due by multiplying by the tax rate.
2. If you acquire an existing house that does not conform to the earthquake resistance standards and also its site, the "Special Exception for Reduction in Value of Land for Residential Use" will also apply to the site.

(Note 3) There are measures designed to reduce the real estate acquisition tax imposed on the buyer-reseller when the buyer-reseller purchases an existing (used) house, makes improvements to certain housing quality, and then resells the house.