Major changes in 2020 municipal tax and metropolitan inhabitant tax

Based on certain criteria, the Minister of Internal Affairs and Communications designates local organizations that are eligible for hometown tax payment (the special deduction portion of donation tax credits related to municipal and metropolitan inhabitant taxes). Please check the website of the Ministry of Internal Affairs and Communications below for the target local organizations.

If you donate to a non-designated organization after June 1, 2019, you will not be eligible for hometown tax payment.
(Note) The special deduction portion of the donation tax credit for municipal and metropolitan inhabitant taxes is not eligible, but the income deduction for income tax and the basic deduction for individual inhabitant tax are eligible.

The following revisions will apply to those who have acquired a house, etc., and used it as a residence between October 1, 2019 and December 31, 2020. However, this does not apply to housing acquisitions where the consumption tax rate is not 10%.

< Extension of applicable years >

The applicable years will be extended from the current 10 years to 13 years.

<Review of special deductible amount for housing loans, etc.>

For the three years after the 11th year, the upper limit of the deduction amount will be set, focusing on the burden of the 2% increase in the consumption tax rate, etc. Specifically, each year, the lesser of the following amounts will be deducted:
(1) 2% of building purchase price ÷ 3

(2) 1% of the year-end mortgage balance

The amount that cannot be fully deducted from the income tax will be deducted from municipal and metropolitan inhabitant taxes within the same credit limit (7% of taxable gross income, etc. (maximum 136,500 yen)) as in the pre-reform system. The deductible limit for the purchase price of the building and the year-end balance of the housing loan is the same as the current level.