Japan’s Property Tax Hike for Vacant Houses(Akiya)

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Author Aki Kojima

Certified Public Tax Accountant with an MBA, member of the Association of Micro M&A Professionals, and licensed real estate agent. I provide tax advisory services, asset management consulting, and support for business owners, freelancers, and sole proprietors. I have extensive experience in international sales, accounting, labor relations, recruiting, and IT management. In addition to my professional work, I write articles and books on taxation and financial education. I enjoy swimming, reading, photography, and spending time in nature with my two children.

July 19, 2023

July 19, 2023

Japan’s property market has significantly shifted in recent years, especially concerning vacant houses. With the government’s recent announcement about a substantial increase in property tax for these empty homes, many property owners and potential investors are left with questions. Let’s delve into this topic to understand the implications better.

The Sixfold Increase: Is it True?

Yes, it’s true. Japan is taking stringent measures to address its growing issue of vacant houses. One of these measures is the significant hike in property tax for empty homes. By the end of 2023, the government plans to amend the bill, with the new law coming into effect in 2024. This law will increase the property tax for vacant houses to six times its current rate.

Why the Increase?

The primary reason behind this drastic measure is to encourage property owners to make better use of their vacant properties. The new tax rate incentivizes owners to rent out, sell, or repurpose their empty homes. The goal is to reduce the number of vacant houses scattered across the country.

When Does the Increase Apply?

It’s essential to note that not all vacant houses will immediately face this tax hike. The increased property tax will apply when a house is designated as a “specified empty house” or a “vacant house with defective management.” This designation comes after a recommendation from a municipality.

The Bigger Picture

Japan currently estimates about 8 million vacant houses, which is rising. The government’s move to increase property tax is a step towards addressing this growing concern. By making it financially less appealing to leave houses empty, the hope is that more homes will be occupied, sold, or repurposed, leading to revitalized neighborhoods and better-utilized spaces.

Conclusion

If you own a vacant property in Japan, now is the time to evaluate your options. Whether you rent, sell, or repurpose, taking action can help you avoid the impending tax increase. And for those considering investing in the Japanese property market, understanding these changes is crucial for making informed decisions.

Do you have more questions about Japan’s property tax changes or the real estate market in general? Drop your queries in the comments below, and let’s discuss!

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