The east border of Japan, which is surrounded by water, is located in the East Asian economic circle with our country, and has cultural origins in the same lineage. In terms of resource, environment and financial management concepts, the two countries have more similarities than those of European and American countries. Japan has long been a wealthy and developed capitalist country, and its real estate development process is undoubtedly of reference for my country, which is moving towards industrialization-post-industrialization. Especially the current storm of property tax, Japan has already wadeed a not-so-short road, which is more valuable for reference.
- Characteristics of Japanese real estate development: two big ups and downs
The biggest feature of Japan's post-war real estate market is two big ups and downs. regained its rise after the real estate market briefly pulled back; the second time it put Japan in a "lost twenty years". Japan's two real estate crises were digested by time and ended the golden age at one time.
The first crisis (1955-1974): arising from the surge in land demand during Japan's rapid industrialization period. Japan's industrial economy began to develop rapidly in 1950, driving the price of industrial land to rise sharply; after 1965, Japan adjusted its industrial structure, and the third industry, represented by the financial services industry, emerged. In addition, urbanization was rapid advancement, and the post-war "baby boom" entered the peak of property purchases, and the supply of residential and commercial land was in short supply. Driven by the dual driving force of industrialization and urbanization, the national urban land price index rose by 28 times from 1955 to 1974, and the six major cities rose by 34 times.
was hit by the double impact of interest rate hike and land tax reform. Land prices fell in 1974, but they regained their gains after 1976. 973 oil crisis triggered vicious inflation in Japan, central bank multiple times, and the rise in land prices slowed down. After a series of tightening measures were introduced, the land price indexes in the country and the six major cities fell slightly by 4.4% and 8.1% respectively in 1975, and land prices returned to the rising channel from 1976.
The second crisis (1986-1991): Arises from the loose monetary environment during the financial liberalization of Japan. 985 " Square Agreement " was signed, the yen appreciated and exports fell, and the government began to cut interest rates many times and relax financial controls. Stimulated by low interest rates, financial liberalization and the influx of international capital, the Japanese real estate bubble expanded again from 1986 to 1990, with the average annual increase in land price indexes in the country and the six major cities as high as 8.3% and 20.6%. Due to the decline in profit margins of real industries, enterprises do not invest in reproduction after obtaining loans, but purchase a large amount of land, cash out mortgages and then speculate on land, and blow up the bubble again and again.
Japanese government implemented measures such as interest rate hikes, tax hikes, and total real estate financing control. In 1991, real estate bubble was punctured, and then the Japanese economy fell into "lost twenty years". Austerity policy caused the real estate bubble to collapse in 1991 and spread from the Tokyo Circle to the entire territory of Japan. In the following 20 years, the national urban land price index fell by 62.7% from its highest point in 1991, and the six major cities fell by as much as 76.0%. The real estate market has since been slumped.
The ends of the two real estate crises in Japan are very different. The fundamental reason is that the economic development stage and population structure have undergone significant changes.
When the urbanization rate is less than 75%, the Japanese real estate market has never accumulated a bubble. When the urbanization rate exceeds 75%, Japan has experienced two real estate crises, and the background of the two crises is significantly different.
First, the economic development stages are different. After the first crisis broke out, the Japanese economy successfully shifted to medium-speed growth, while after the second crisis broke out, the Japanese economy fell into long-term stagnation.
Second, the population age structure is different. When the first crisis broke out, the population of Japanese aged people was still at a high level, and the real demand was strong. When the second crisis broke out, Japan's aging problem was very serious. The proportion of the population over 65 years old accounted for 12.1%, and it has continued to rise since then. The population of 20-49 years old started to decline after 2000, and effective demand decreased. The urbanization rate in 2010 was 90.7%, which was significantly higher than when the first crisis broke out.
- The impact of Japanese property tax on the real estate market: the rise is suppressed slightly, the downward trend is a big drop
Japan's property tax began to be collected as early as 1950, which is basically in line with Japan's post-war economic takeoff and rapid real estate development. The resistance of property tax on Japan's real estate to the peak is not great. The Japanese real estate bubble burst and the Japanese economy fell into "lost twenty years". The fundamental reason is that economic development slowed down, the population structure showed a turning point, and insufficient effective demand. The role of property tax in it is relatively limited. But it cannot be said that property tax has nothing to do with the prosperity and decline of Japan's real estate.
The holding and transaction costs of real estate have different impacts on residents and corporate behaviors at different stages. When the real estate market is in an upward period, the low holding cost and high transaction costs lead to residents and enterprises tend to hold land, forming a positive feedback effect of with the price, which in turn prompts the rapid rise of prices; when the real estate market is in a downward period, a slight increase in holding cost and can also aggravate land selling behavior.
Real estate prices are upward, and real estate-related taxes are imposed will have a certain impact in the short term, but in the long run, the regulatory effect will not be obvious. htmlIn the 170s, the Japanese government carried out land tax reform, creating land transfer income tax for individuals and legal persons, levying equal tax on agricultural land, and creating special land retention tax in order to increase land supply. Although the rapid rise in land prices was effectively controlled in the short term, land prices returned to the upward trend after only one year of correction. In the late 1980s, Japan's real estate market was extremely hot. In order to crack down on speculation in the land market, the government established ultra-short-term land transfer income tax in 1987, requiring heavy taxes to be imposed on land transactions that were less than two years old. The low cost of land holding and high transaction costs have led to residents and enterprises' tendency to hold land, which has caused insufficient supply in the land market, which in turn has pushed up the rapid rise in prices and cannot effectively curb the rise in land prices.
During the downward period of the real estate market, even if the tax is slightly increased, it can aggravate the market downturn. 991, the Japanese real estate market was already in a downward channel, but in order to completely clear the bubble, the government imposed land price tax on land owners, and at the same time strengthened the regulation of special land retention tax. Although the tax rate was low, the real estate market was in a downward period at this time. The increase in tax reflects the government's determination to regulate, and market expectations quickly reversed, accelerating the decline in land prices. The market was out of control in the end, and the sluggish real estate market after the collapse became the most obvious feature of Japan's "twenty years of losing ".
Overall, the Japanese property tax " focuses on transactions and light on retaining ". The tax rate for the holding process is light, and a heavy tax will be imposed for short-term transactions. The purpose is to strengthen the housing and encourage residents to hold it for a long time. Speculation and land speculation are the focus of suppression. taxation and tax adjustments to land holdings and transactions have accompanied the entire process of Japanese real estate upward, becoming a powerful tool for the government to crack down on the real estate bubble. But too much is too little. Various land taxes have contributed to breaking through the Japanese real estate bubble during the downward period. The impact is probably far beyond the original intention of the government to introduce land taxes. In 1991, real estate declined from prosperity and decline, and the original land tax was abolished one after another. Japan's property tax has returned to the origin of levying residential real estate buildings.
From the history of the rise and fall of the Japanese real estate market, it can be seen that the development trend of real estate is ultimately determined by the economy and population. However, once the real estate market enters a downward period, especially with the economic slowdown and the inflection point of the population birth rate of , the gradual increase in property tax is like a snowball that is getting bigger and bigger on the downhill road, becoming the last straw that crosses real estate. This is an important inspiration for the impact of Japan's property tax on real estate. How to impose property tax during the economic and real estate downward period is a major issue that tests the art of government management.
- Japanese real estate tax: low actual tax burden, multiple exemptions and exemptions
Japanese real estate tax began to be levied in 1950 and has been continuously improved over decades of practice, forming a relatively mature collection system and a relatively complete exemption system. Unlike our country's public land ownership , Japan is a private land ownership country, and the land and real estate owned by residents can be inherited from generation to generation. Japan's real estate tax system is also relatively complicated.
Currently, the taxes related to real estate in Japan mainly include three categories: Real estate acquisition tax, real estate holding tax, and real estate transfer income tax , covering the entire process of obtaining, retaining and transferring real estate. Taxation of real estate transactions and transfers has long been conducted in my country. The property tax in the usual sense of domestic property mainly corresponds to the Japanese real estate tax.
In the process of holding Japanese real estate, the owner needs to pay the following two taxes, namely: Fixed asset tax and urban plan tax .
When collecting Japanese property tax, it involves land, property value assessment and tax reduction and exemption . The actual tax paid by the real estate owner is far lower than the statutory tax rate. The actual taxable rate of Japan's two real estate taxes is:
- Fixed asset tax: Taxable appraisal amount * 1.4% - Reduction and exemption
- Urban planning tax: Taxable appraisal amount * 0.3% - Reduction and exemption
. Real estate value appraisal
Japan's basis for taxation on land and houses is calculated based on market value, which Japan calls "appropriate current price". Japan generally conducts a basic assessment every three years. The year of valuation is called the base year, and the price in that year is called the base year value. In the following two years, if there is no major change, the price will generally not be revaluated. The land appraisal committee of the Ministry of Land, Infrastructure and Transport will determine the public price of the property every year. The price at the time of evaluation is generally lower than the value at the time of purchase of the property.
2. Tax Reduction and exemption policy
, Fixed asset tax
- Reduction and exemption policy for residential land : The part of residential land less than 200 square meters is called "small-scale residential land", and is calculated based on one-sixth of the tax standard amount. The part above 200 square meters is called "general residential land" and is calculated based on one-third of the tax standard amount. However, the building area on the land cannot exceed 10 times the land area.
- Building exemption policy: For the part of newly built buildings to 120 square meters, the first three years of general residential buildings, the first five years of refractory or quasi-refractory residential buildings with more than three floors will be reduced by half. However, the living part of a must-have house is more than 1/2 of the building area; or: the living area is more than 100 square meters and less than 200 square meters, the rental house is more than 35 square meters and less than 200 square meters, and the evaluation amount of 1 square meter is limited, the wooden construction shall not exceed 112,000 yen, the quasi-refractory structure shall not exceed 144,000 yen, and the refractory structure shall not exceed 176,000 yen.
, Urban planning tax
- Reduction and exemption policy for residential land: Residential land less than 200 square meters is called "small-scale residential land", and is calculated based on one-third of the tax standard amount. The part above 200 square meters is called "general residential land" and is calculated based on two-thirds of the tax standard amount.
- Building exemption policy: exempts from real estate with a tax base of less than 200,000 yen.
3. Tax payment date: Receive a tax notice from April to May every year, and taxpayers can choose to pay once or in quarterly manner.
The total of fixed asset tax in Japan's real estate tax plus urban planning tax reaches 1.7%. Due to the various tax exemptions, the annual comprehensive tax rate for a property in Japan is less than 1%.Moreover, the appraised value of fixed assets is often lower than the market value of real estate and land. The price of residential land is generally 60%-70% of the land market price at that time, and the price of building is evaluated at 50%-70% of the construction fee. Therefore, the actual purchase price of villa-style houses with an appraisal amount of 30 million is 45 million or more. According to statistics, the annual actual tax rate for Japan's real estate tax is only about 0.4-0.6%.
Japanese property tax also reflects humanistic care. For example: if the landlord is over 65 years old, or the disabled need access to the house to rebuild the house, houses within 100 square meters can also enjoy a discount of 1/3 of the fixed asset tax exemption. In Japan, where economic development is almost stagnant, the elderly are the generation who have truly enjoyed the dividends of the times, and their wealth and real estate are also mainly concentrated in the hands of the elderly. In severely aging Japan, such tax exemptions cover a wide range of areas.
In addition, in order to encourage residents to renovate high-quality residential buildings, the Japanese government will give a preferential policy of halving the fixed asset tax of 3 to 7 years based on the conditions of residential quality and whether it is a high-rise fireproof residential building; for renovated houses, those who meet earthquake resistance standards or pass safety inspections, they will enjoy a preferential policy of halving the fixed asset tax of 1 to 2 years; for renovated houses with barrier-free facilities or meet energy-saving standards, 1/3 of the fixed asset tax can be exempted. Various property tax deduction policies have invisibly reduced the burden of property tax.
In 2018, the average annual income of all households in Japan was 5.523 million yen (360,000 RMB). The proportion of Japanese property tax to household annual income is generally between 2% and 3%, and the tax burden of property tax is relatively not high.
Real estate tax is a local tax in Japan. The property tax in the maintenance link pays more attention to fiscal functions, focusing on supplementing local tax source , serving the public expenditure needs of local governments. According to a statistics in the 2013 fiscal year, fixed asset tax in cities and villages in Japan accounts for 42% of the total tax revenue. If the higher-level government transfers to lower-level governments, the proportion of fixed asset tax in local governments' fiscal revenue will be reduced.
