Japan to Cut Housing Loan Tax Exemption Rate to 0.7 Pct

Politics Lifestyle

Tokyo, Dec. 6 (Jiji Press)--The Japanese government and ruling camp plan to lower the tax exemption rate for housing loan borrowers to 0.7 pct from the current 1 pct, sources familiar with their discussions said Monday.

Amid low interest rates, housing loan rates are below 1 pct per year in many cases, giving borrowers unduly preferential treatment under the current system. The cut in the tax exemption rate is aimed at correcting the problem, the sources said.

Government and ruling coalition officials aim to include the reduction in annual tax system reform proposals for fiscal 2022, which starts in April, the sources said.

Currently, 1 pct of the outstanding balance of housing loans at the end of a calendar year is deducted mainly from the income taxes of eligible borrowers.

In order to cushion the impact of the reduction, the duration of the tax breaks will be set at 13 years in 2022 and 2023, compared with 10 years in principle and a maximum 13 years at present, the sources said. The period will be set at 10 years in 2024 and 2025, they said.

[Copyright The Jiji Press, Ltd.]

Jiji Press