The official name of the mortgage deduction is “special deduction for housing loans, etc.”, and it is sometimes called “mortgage tax exemption” as a national system.
It is a system that can be used when a house is newly built or acquired, or expanded or remodeled using a certain mortgage. However, the floor area of the house must be 50 square meters or more, and more than half of the floor area must be exclusively used for living . In addition, the mortgage must be a housing loan with a repayment method of more than 10 years, and even if you take out the housing loan from your own parent or acquaintance, you will not be eligible for deduction. It must be from the certified banks.
The 1% of the year-end balance of mortgages (balance of mortgages as of December 31) and up to 400,000 yen will be deducted from the income tax paid that year. If there is an amount that cannot be deducted from the income tax, a maximum of 136,500 yen can be deducted from the inhabitant tax.
Since the deduction period is for 13 years, a total of up to 4 million yen (5 million yen for certified long-term excellent housing, 2 million yen for pre-owned housing exempt from consumption tax) will be refunded.
To receive a mortgage deduction, you must file the tax return form the after you move in in the same year. The tax return period is “from January 4 to March 15 of the following year” for company workers and other self employees.
You can prepare your tax return and submit it to the tax office in your jurisdiction, or you can file it by mail.
If a company worker has no income other than salary, you have to ask employer for withholding slip. You need to fill out the tax return form on the basis on the withholdings.
The best way to file the mortgage deduction is just to visit the tax office in your jurisdiction.
In the tax time, there are so many temp workers work there. You don’t have to wait too long.
They are willing to help to tell us how to file the tax return forms with the mortgage deduction. At the same time, you can file for other deductions, too such as earthquake insurance, medical costs, life insurance, donations,etc…
1.The official registrations of the land and building which you can get at the Legal Affairs Bureau in your jurisdiction.
2. The official balance of the housing mortgage. ( The bank send the letter to you at the end of the year.
3. The copy of the contract of the property.
I will visit the tax office with you if you don’t mind.
Koji Kitada. English speaker. The licensed real estate sales person.