FAQ on Fixed Asset Tax

A. Property revaluation refers to reviewing the assessed value of land and buildings.
In principle, property values should be reviewed every year based on their current market value (“fair value”) to ensure fairness among taxpayers. However, since it is impractical to re-evaluate every property annually, the valuation is generally reviewed once every three years. The next revaluation was conducted in FY2021.

A. During the economic bubble, land prices rose sharply, creating a large gap between market prices and assessed values. 
To reduce this gap, the 1994 revaluation raised the assessed value ratio from about 20–30% of market value to about 70%. As a result, assessed values in Niseko increased to more than three times their previous level on average. To avoid sudden increases in the tax burden, a gradual “tax burden adjustment” system was introduced. This means the taxable standard amount increases slowly each year until it matches the assessed value.
Even now, although property values have decreased, the taxable amount may continue to rise until it reaches the assessed value.
For this reason, a phenomenon such as "land prices have declined, but taxes rise" has occurred.

A. If the taxable value of all properties owned by one person in a municipality is below the exemption limits (¥300,000 for land, ¥200,000 for buildings, ¥1,500,000 for depreciable assets), tax is not charged. However, due to the gradual increase in taxable value explained earlier, the amount may now exceed the exemption limit, resulting in taxation starting this year.

A. Fixed Asset Tax is charged to the person listed as the owner in the property registry as of January 1 of each year. Even if ownership changes later, the person registered on January 1 is responsible for that year’s tax. How the seller and buyer share the tax is up to their private agreement, so please check your sales contract.

A. Land used for residential buildings is eligible for a special tax reduction. However, this benefit only applies if a residential house stands on the land as of January 1. Because your house was demolished, the land no longer qualifies for this reduction, so the tax increased.

A. Newly built houses that meet certain conditions qualify for a 50% tax reduction for three years (or five years for fireproof buildings with three or more stories). Your reduction period has ended, so your tax has returned to the normal amount.

A.The assessed value of a house is based on the reconstruction cost (the cost to rebuild the same structure at current prices) multiplied by a depreciation rate based on its age. If construction costs rise faster than the depreciation rate, the assessed value can even increase despite aging. However, when revaluation raises the assessed value, it is usually capped at the previous level to avoid excessive tax burdens. Therefore, the Fixed Asset Tax on older houses does not necessarily decrease every year. (The depreciation rate has a lower limit of 20%.)

A. The house is appraised according to national standards set by the Ministry of Internal Affairs and Communications. Factors such as the materials and finish of the roof, walls, and foundation are considered. Structures not integrated with the building, such as gates and fences, are excluded. Purchase or construction costs are not directly used in the calculation.

A. For the building, your share is calculated based on the ratio of your unit’s floor area (including your share of the common area) to the total building area. For the land, your tax is calculated by multiplying the total land tax by your ownership share.

A. Please submit a “Demolition Notification (滅失届)” to the Fixed Asset Tax Section of the Tax Division.
Since tax is levied on houses standing as of January 1 each year, if demolition occurs after that date, the full year’s tax remains payable.
If you already registered the demolition with the Legal Affairs Bureau, you do not need to submit the notification.

A.For unregistered houses, submit a “House Ownership Change Notification (Kaoku idō todoke)” to the Fixed Asset Tax Section Tax Division.
If the building is registered, ownership changes are automatically reported to the town from the Legal Affairs Bureau. However, for unregistered houses, the town cannot recognize ownership changes without this notification.