Major changes to municipal and metropolitan resident taxes for fiscal year 2020

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

If you make a donation after June 1, 2019 to an organization that is not designated, it will not be eligible for hometown tax payment.
(Note) The special deduction portion of the donation tax deduction for municipal tax and Tokyo inhabitant tax is not eligible, but the deduction for income tax and the basic deduction portion of individual residence tax are eligible.

The following revisions will apply if you purchase a home between October 1, 2019 and December 31, 2020 and use it for residential purposes. However, this will not apply to purchases of homes that are not subject to the consumption tax rate of 10%.

<Extension of applicable years>

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

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

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

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

The amount that cannot be fully deducted from the income tax amount will be deducted from the municipal tax and metropolitan inhabitant tax within the same deduction limit (7% of the taxable gross income amount, etc. (up to 136,500 yen)) as in the pre-revised system. The deductible limits for building purchase price and year-end mortgage balance will remain at the same level as currently.