Top Court Backs Real Estate Revaluation over Inheritance Tax


Tokyo, April 19 (Jiji Press)--Japan's Supreme Court on Tuesday backed tax authorities' decision not to acknowledge the appraised value of real estate based on roadside land prices set by the authorities, which were significantly lower than market prices, in an inheritance tax case.

The ruling was supported by all five justices at the top court's Third Petty Bench. Presiding Justice Yasumasa Nagamine said the use of the roadside land prices in the case went against the equal distribution of tax burden.

According to the ruling, a man from the city of Sapporo, Hokkaido, northernmost Japan, and others inherited two condominium buildings in Tokyo and the city of Kawasaki, south of the Japanese capital, from his father, who had purchased the two properties for a total of 1,387 million yen.

In 2013, they declared inheritance taxes of zero yen after putting the condominiums' value at around 333 million yen, based on the roadside land prices, and taking into account loans taken out to purchase the buildings.

In 2016, however, tax authorities revised the value of the two condominiums to 1,273 million yen and imposed around 330 million yen in back taxes. For the revaluation, the authorities used a rule specified in the National Tax Agency's notification. The rule allows exemptions from the use of the roadside land prices if there are wide gaps between the prices and market prices.

[Copyright The Jiji Press, Ltd.]

Jiji Press