Effects of Social Security and Tax Number System on Real Estate Investment
The recent Social Security and Tax Number System was implemented in January 2016. What is Social Security and Tax Number System? And what influence does it have on real estate industry?
What is it for?
The government can manage citizens’ personal information with twelve-digit numbers called “My Number” for Social Security and Taxation purposes. This system enables institutions including banks, companies, and local government to identify a person using his or her number. Since “My Number” is as personal as your credit card number, it is best to keep it confidential. If you are requested to tell your number, you need to discern whether not not the person or institution you are disclosing the information to is trustworthy.
Have real estate transaction procedures changed?
For now, real estate transactions are exempted from the system. There is no need to share your Social Security number when purchasing or selling a property. However, you do need to submit your number in following cases:
・When foreigners open a Japanese bank account or exchange money to yen.
Foreigners who do not live in Japan cannot open Japanese bank account because they are not given Japanese Social Security numbers. For this reason, generally foreigners make their purchasing payment directly to the seller’s bank account. If you want to secure a safe transaction, you also can transfer money through a real estate company’s bank account. If you already have Japanese bank account but do not live in Japan, confirm with your bank whether you need to submit your Number immediately or if you still can pay into your bank account from abroad without the Number.
・ when the seller is an individual and the buyer is a corporation
・The total payment for purchase is over ￥1,000,000/year or the total payment for renting is
Because corporations must submit a payment report to a tax office every year, they are required to fill out the seller’s Number.
All in all, if you already have a bank account in Japan, they might require you to submit your number when you send money to abroad. Also, even if you do not have your number, you should confirm with a bank because some of the banks still do not require you to submit your number. Moreover, if you are to rent out a room to a company, you need to tell your number to them for filing a final return form for the income tax of the year. In that case, you need to be careful because the number is a private information and you should not easily tell it to others.
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