Japan to Extend Tax Relief on Energy Efficient Home Renovations

The government and the ruling coalition are planning to extend a tax break system for people who renovate their homes, sources familiar with the matter said. The home renovation tax relief is set to expire at the end of this year but government and ruling coalition officials are considering keeping it in place until the end of 2023, the sources said.

The decision to extend the program is aimed at promoting sales of used homes amid a spike in vacant homes across the country. Under the tax breaks, people who renovate to make their homes energy-efficient, barrier-free or resistant to earthquakes are eligible for income tax deductions. A portion of loans taken to finance renovations are deducted from income tax, while for self-financed renovations, part of the construction costs are tax-deductible.

For renovations meeting certain requirements, 2% of year-end outstanding loans, or up to ¥250,000, can be deducted from income tax for five years. A 1% deduction for loans of up to ¥10 million is available for other renovation work. For self-financed renovations, 10% of the construction costs can be deducted from income tax, or up to ¥500,000 for homes meeting all requirements ranging from earthquake resistance and energy efficiency to durability.

Government officials are also considering easing the requirements for tax cuts related to insulation-related renovations that make homes more energy-efficient. A plan under consideration calls for requiring people to only replace some of their windows to improve insulation, instead of all windows as is currently required. The move is aimed at promoting energy-efficient homes that do not require the heavy use of air conditioners.


(Source: The Japan News | Pic: Rural Japan, Rick Cogley)
Share on facebook
Share on linkedin
Share on twitter
Share on email

Related Articles

General, Investors/Business
News
Japan’s work culture is in many ways a legacy of decades past, a time when most women got married, quit their jobs and raised a family, while their husbands became the sole breadwinner with long work hours. Unfortunately, raising a family and caring for elderly family members has stereotyped women as the lesser valued gender in the eyes of an employer. The coronavirus is giving this inequality a shake-up...
Holiday/Home Makers, Investors/Business
Information
Assuming you’ve established some key relationships with local realtors in your areas of choice, you will sooner or later come across a potential deal which will suit your criteria. The process, from here on, is quite similar to what you’d expect in any country, but with a few important differences...
General
Japan adopted a new energy policy on Friday that promotes nuclear and renewables as sources of clean energy to achieve the country’s pledge of reaching carbon neutrality in 2050. The new basic energy plan, adopted by the Cabinet just in time for the climate summit in early November, calls for drastically increasing use of renewable energy to cut fossil fuel consumption over the next decade as Japan pushes to meet its ambitious emissions reduction target.
General
News
One would think that with Covid-19 and between people keen on running away from major urban centres to get away from crowds, and Japan’s aging demographics, the residential property market would take a hit. No so! In fact, just the opposite. Institutional investors have, in fact, been pouring funds into portfolios.