Tax effect #1

  • Tokyo Property News

    Tax effect #1

    The year 2015 begins and many people are starting their work.
    But probably, may people are still in the holiday mood, please keep up their work and hope this blog may give some kind of refreshment.

    Last year, probably one big effect to the real estate market was Tax, especially the consumption tax.(“Shohi-zei” in Japanese)
    Especially cosumption tax increased from 5 to 8 on April, number of people came into housing market and purchase their property but it stable once the consumption tax increased into 8%.
    Consumption tax has been 5% since 1997 but as the main reason by the depth of this country own and defect of insurance system inside country may happen in the future by population aging, it officially approved rise 8% from April 2014.
    Seems the country outside Japan is thinking this movement is slow by comparing with other country, but this increase is unfamiliar phenomenon from the people living inside the country.
    People are now calculating and re-planning what becomes the effect to each family by this tax increase.
    One(would say, most) item recognize to have big effect is the real estate.
    Because the price per unit is higher than other items, tax rate also rise along with the price itself.

    Also, there originally had a plan to increase this 8% consumption tax to 10% in this October but postponed due to the economy situation went not well thank they originally expected.
    Currently, 10 % is planning to come in Apr. 2017 but prime minister will probably have some announcement beforheand.

    This consumption tax simply effect to the moment when you purchase apartments or houses. At the time when people buy apartments or houses, simply their motivation will rise if they have anything which comes in short time period.(ex. 8% tax rise in April and try purchase before April.)
    As you know the real estate is a big amount of purchase, it effect also becomes more bigger.
    For example, if you willing to purchase 30,000,000 yen property and if the tax rate is 5%, price becomes 31,500,000 yen but if it becomes 8%, the price becomes 32,400,000 yen and the difference becomes 900,000 yen.
    This difference becomes more wider if the price is higher.

    At the time, probably everyone will think about how to reduce cost and tax system becomes one important factor when consider.
    From next note, we would like to introduce some tax items which comes(include, may coming) when you purchase the propety.



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