Japan Mortgage Loan Tax Cut to Be Extended for 5 Yrs

Tokyo, Dec. 3 (Jiji Press)–The Japanese government and the ruling bloc plan to extend the existing tax cut program for mortgage loans for some five years, beyond its scheduled expiry at the end of 2025, informed sources said Wednesday. They will also mull expanding the size of the tax reduction to provide more support for house purchasers, according to the sources. They will discuss details of the cut for inclusion in the tax reform package for fiscal 2026. Under the current reduction system, house purchasers are granted a deduction of 0.7 pct of the outstanding loan balance at year-end from their income and resident taxes for a certain period. For purchasers of newly built houses, the upper limit of the outstanding loan balance subject to the reduction varies between 30 million and 50 million yen depending on the environmental performance of the home. They can receive the deduction for up to 13 years. Child-rearing and younger households are provided with preferential treatment. For purchasers of pre-owned houses, the upper limit is set between 20 million and 30 million yen. The tax cut is applied for up to 10 years. The government and the ruling camp will consider raising the limit for pre-owned houses amid increasing demand for them due to rising housing prices, the sources said. They will also examine easing the condition on floor areas, planning to loosen the current requirement of 50 square meters or more to some 40 square meters or more, aiming to allow single-person and small households to receive the tax cut. END [Copyright The Jiji Press, Ltd.]