Policy Bureau：Tax system on possession of land - MLIT Ministry of Land, Infrastructure, Transport and Tourism

Tax system on possession of land

Tax items	Taxpayer	Object of taxation	Tax base	Tax rate	Special rules, etc.
Fixed assets tax (Municipal tax)	Owner of fixed assets	Lands, buildings and depreciable assets	Price of fixed assets(Assessed value of fixed assets tax)	Standard tax rate 1.4% Limited tax rate 2.1%	Special rule concerning tax base for residential land – General residential land: 1/3 of the price – Small-scale residential land: (Up to 200 m²) 1/6 of the price Under ordinances by the local government, tax amount on commercial lands, etc. can be equally reduced (until the 2008 fiscal year) Subject to tax in the same amount as that on residential land relating to agricultural land in the specially designated urbanization area within one of the three major metropolitan areas Special rule concerning new houses for rent built by an owner of agricultural land in the specially designated urbanization area, etc.
City planning tax (Municipal tax)	Owner of a land or a building in the specially designated urbanization area, etc.	Land and building	Same as fixed assets tax	Limited tax rate 0.3%	Special rule on tax base for residential lands – General residential land: 2/3 of the price – Small-scale residential land (residential land of max. 200 m²): 1/3 of the price Under ordinances by the local government, tax amount on commercial lands, etc. can be equally reduced (until the 2008 fiscal year ) *Subject to tax equal to that on residential land relating to an agricultural land in the specially designated urbanization area within one of the three major metropolitan areas
Special landholding tax on possession of land (Municipal tax)	Land owner	Land	Acquisition price of land	1.4%(Amount equal to the fixed assets tax is deducted.)	Tax imposition temporarily stopped from the 2003 fiscal year Tax collection postponement system concerning the land (residential land, etc.) for nontaxable purpose Tax collection postponement system and tax obligation exemption system concerning the land to transfer for serving as house or residential land, or to build a permanent building Tax collection postponement system in the case of land transfer or alteration of business plan Since the 2005 fiscal year, the extension period for nontaxable lands and land transfers to which the special exemption rule is applied has been in principle limited to 10 years, after the current collection postponement period is over. For some of the “lands to be used as residential land” on whose transfer tax collection is postponed as special transfer, the tax obligation will be exempted at the time of public offering of transfer after the land formation, not at the time of transfer as currently exempted. *The plan can be changed twice, although currently it is allowed only once.

Tax items

Taxpayer

Object of taxation

Tax base

Tax rate

Special rules, etc.

Fixed assets tax
(Municipal tax)

Owner of fixed assets

Lands, buildings and depreciable assets

Price of fixed assets(Assessed value of fixed assets tax)

Standard tax rate
1.4%

Limited tax rate
2.1%

*Special rule concerning tax base for residential land
– General residential land: 1/3 of the price
– Small-scale residential land: (Up to 200 m²) 1/6 of the price
*Under ordinances by the local government, tax amount on commercial lands, etc. can be equally reduced (until the 2008 fiscal year)
*Subject to tax in the same amount as that on residential land relating to agricultural land in the specially designated urbanization area within one of the three major metropolitan areas
*Special rule concerning new houses for rent built by an owner of agricultural land in the specially designated urbanization area, etc.

City planning tax
(Municipal tax)

Owner of a land or a building in the specially designated urbanization area, etc.

Land and building

Same as fixed assets tax

Limited tax rate
0.3%

*Special rule on tax base for residential lands
– General residential land: 2/3 of the price
– Small-scale residential land (residential land of max. 200 m²): 1/3 of the price
*Under ordinances by the local government, tax amount on commercial lands, etc. can be equally reduced (until the 2008 fiscal year )
*Subject to tax equal to that on residential land relating to an agricultural land in the specially designated urbanization area within one of the three major metropolitan areas

Special landholding tax on possession of land (Municipal tax)

Land owner

Land

Acquisition price of land

1.4%(Amount equal to the fixed assets tax is deducted.)

*Tax imposition temporarily stopped from the 2003 fiscal year
*Tax collection postponement system concerning the land (residential land, etc.) for nontaxable purpose
*Tax collection postponement system and tax obligation exemption system concerning the land to transfer for serving as house or residential land, or to build a permanent building
*Tax collection postponement system in the case of land transfer or alteration of business plan
*Since the 2005 fiscal year, the extension period for nontaxable lands and land transfers to which the special exemption rule is applied has been in principle limited to 10 years, after the current collection postponement period is over.
* For some of the “lands to be used as residential land” on whose transfer tax collection is postponed as special transfer, the tax obligation will be exempted at the time of public offering of transfer after the land formation, not at the time of transfer as currently exempted.
*The plan can be changed twice, although currently it is allowed only once.