Home Loan Tax Deduction
(applicable only to a purchaser who has purchased the property for the purpose of residence)
(From January 1, 2014 to December 31, 2021)
The home loan tax deduction allows you to deduct 1% (or up to 400,000 yen) of your home mortgage remaining at the year-end from your income tax each year (for 10 years).
If the acquisition price is lower than the year-end mortgage balance, the deduction is calculated as 1% of the acquisition price.
If the deduction exceeds your income tax liability, the remainder may also be partially deducted from your residential tax.
Conditions and procedures for applying for the tax deduction
- You shall file your tax return using an application form, Kakutei Shinkokusho, with the required evidence and documents for the first year. From the second year onwards, you shall be eligible for the tax deduction at the time of the year-end adjustment.
- Eligibility shall be limited to those homes with a floor area exceeding 50 sqm.
- Your personal annual income must not exceed 30 million yen.
- Secondhand houses: Less than 20 years old. Secondhand condominiums: Less than 25 years old
- The mortgage term must be more than 10 years.
- The property must not be subject to the special deduction for long-term capital gains (deductible up to 30 million yen or 10.21% of taxable gains), which is the special deduction for the property for residential purposes that is transferred during a total period of five years, including the year when the property begins to be used as a residential asset, and two years before and after this year.
* Please note that you shall not be eligible for the special tax deductions as described above if your loan is used for investment purposes.
- 居住用的一年和前後兩年的一共5年内沒有用過”居住用財産譲渡長期譲渡所得課税特例 (3000万日元控除、税率10.21％) 。