Japan to Extend Tax Deduction for Housing Loan Users by 3 Years
Newsfrom JapanPolitics Economy
Tokyo, Dec. 4 (Jiji Press)--The Japanese government and ruling camp have started work to extend the current 10-year tax deduction program for housing loan borrowers by three years as a measure to cushion the impact from a 2 pct consumption tax hike scheduled for October next year.
Currently, one pct of year-end loan balances of up to 40 million yen is deducted from income tax for 10 years and refunds are made next year, with the upper deduction limit set at 4 million yen.
Under consideration by the government and the ruling coalition led by the Liberal Democratic Party is the introduction of a system in which 2 pct of prices for buildings, such as houses and apartments, will be deducted from the tax for the extended period.
The loan balance-linked tax break formula can be applicable during the three years, but the actual tax deduction amounts will be 2 pct of building prices or the three-year total of one pct of year-end loan balances, whichever is smaller.
The tax break extension will be part of fiscal 2019 tax reforms, which the ruling bloc will outline on Dec. 12 at the earliest.
[Copyright The Jiji Press, Ltd.]