Fiscal Year 2012 Tax Reform (Amendment of Burden Adjustment Measures for Residential Land, etc.)

Due to the amendment of the Local Tax Law, the method for calculating the taxable standard amount, which serves as the basis for calculating Property Tax and Urban Planning Tax for residential land, has been changed.

About Burden Adjustment Measures

Property Tax and City Planning Tax are generally calculated based on the assessed value as the tax base. However, for land, due to measures to suppress rapid increases in tax amounts, there is variability in the degree of separation between the assessed value and the tax base ( burden level ). As a result, even for land with similar prices, there may be differences in the tax base, leading to varying tax burdens. To balance the burden levels and ensure fairness in tax burdens, the tax base for land with a burden level above a certain threshold is suppressed, while the tax base for land below that threshold is gradually increased.

How to Determine the Burden Level

The burden level (%) is calculated by
Previous year's taxable standard amount ÷ Current year's assessed value (× Special rate for residential land, etc.) × 100
.

Overview of the Amendment

Until the fiscal year 2011, for residential land and similar properties with a burden level of 80% or more, the tax burden was the same as the previous year (fixed). However, due to tax reform, the calculation method will be changed in the following two stages.

1. From fiscal year 2012 to fiscal year 2013, for residential land, the burden level subject to an increase in the taxable standard amount will change from "less than 80%" to "less than 90%", and the level that is subject to being maintained will change from "80% or more but less than 100%" to "90% or more but less than 100%", thereby reducing the special exception for maintenance.
2. Since the fiscal year 2014, the special exception for residential land with a burden level of 90% or more has been abolished, and land with less than 100% will be subject to an increase.

In addition, the special exception for non-residential land such as commercial areas will continue.

Calculation Method for Taxable Standard Amount of Small-Scale Residential Land, General Residential Land, and Agricultural Land in Urbanization Areas

Fiscal Year	Burden Level Over 100%	Burden Level From 90% to 99%	Burden Level Up to 89% from 80%	Burden Level Less than 80%
Calculation Method for Taxable Standard Amounts Before Fiscal Year 2011	In cases where the burden level is 100% or more... Standard taxation amount (price × special rate)	If the burden level is 80% or more but less than 100%... Maintain the previous year's (reference) taxable standard amount	If the burden level is 80% or more but less than 100%... Maintain the previous year's (reference) taxable standard amount	If the burden level is less than 80%... Previous year's (reference) taxable standard amount + standard taxable amount × 5%...〔a〕 If (a) exceeds 80% of the standard taxable amount, the amount equivalent to 80% If (a) is less than 20% of the standard taxable amount, the equivalent amount is 20%.
Calculation Method for Taxable Standard Amounts for Fiscal Year 2012 and Fiscal Year 2013	In cases where the burden level is 100% or more... Standard taxation amount (price × special rate)	If the burden level is 90% or more but less than 100%... Maintain the previous year's (reference) taxable standard amount	If the burden level is less than 90%... Previous year's (reference) taxable standard amount + standard taxable amount × 5%...〔a〕 If [a] exceeds 90% of the standard taxable amount, the amount equivalent to 90% If (a) is less than 20% of the standard taxable amount, the equivalent amount is 20%.	If the burden level is less than 90%... Previous year's (reference) taxable standard amount + standard taxable amount × 5%...〔a〕 If [a] exceeds 90% of the standard taxable amount, the amount equivalent to 90% If (a) is less than 20% of the standard taxable amount, the equivalent amount is 20%.
Calculation Method for Taxable Standard Amount from Fiscal Year 2014 Onwards	In cases where the burden level is 100% or more... Standard taxation amount (price × special rate)	If the burden level is less than 100%... Previous year's (reference) taxable standard amount + standard taxable amount × 5%...〔a〕 If [a] exceeds 100% of the standard taxation amount, the standard taxation amount applies. If (a) is less than 20% of the standard taxable amount, the equivalent amount is 20%.	If the burden level is less than 100%... Previous year's (reference) taxable standard amount + standard taxable amount × 5%...〔a〕 If [a] exceeds 100% of the standard taxation amount, the standard taxation amount applies. If (a) is less than 20% of the standard taxable amount, the equivalent amount is 20%.	If the burden level is less than 100%... Previous year's (reference) taxable standard amount + standard taxable amount × 5%...〔a〕 If [a] exceeds 100% of the standard taxation amount, the standard taxation amount applies. If (a) is less than 20% of the standard taxable amount, the equivalent amount is 20%.

• Reference: Changes in Taxation for Residential Land (Illustration) (PDF 139.4KB)
• Reference: How to Determine the Detailed Taxable Standard Amount for Land (PDF 258.9KB)