How Will Increasing Consumption Tax Rate to 10% will Affect the Purchase of Property?
For those who are considering buying a property in Japan and finding the one fit to your criteria, there are varying types of taxes you would have to pay after buying a property.
In addition to these taxes, there is also a consumption tax. The tax rate is 8% now, however, the rate will increase to 10% in 2017. Many people are concerned with how this increase will affect their purchasing price. So here is what you need to know about the consumption tax.
What fees are subject to consumption tax?
property price (Land is tax-free)fee for creating or leveling groundconstruction or renovation feecommission fee for brokerage agentfees for Judicial Scrivenerloan origination feefees for parking lot (the rent for house or apartment is tax free)
When is the best time to buy a property before the tax rate increases?
All the properties that will be handed over to the buyer are subject to the new tax rate, 10%.
If the contract was closed until half year before April 1, 2017, which is September 30, 2016, the old tax rate will be applied even when handing over is after April 2017.
How the tax reduction on housing loans will change as the tax rate changes?
It is expected that there will be a lot of buyers rushing to buy a property before the tax rate changes. The good news is that even if you buy a property once 10% rate applies, you still can get tax reduction on your housing loan. If you extend the expiration date on deduction of your housing loan to June 2019, your tax reduction will be as follows:
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