The government and ruling parties are planning to keep taxes untouched for all types of land in fiscal 2021, including commercial, residential and agricultural sites, if the amount levied had been set to rise along with higher land prices.
The special measure is aimed at reducing the financial burden on taxpayers amid the economic downturn caused by the spread of the novel coronavirus. It will be stipulated in the outline of tax reforms that the ruling parties aim to compile as early as Thursday.
Property taxes are calculated based on appraisals of land value, which are conducted every three years. The taxes for a three-year period set to begin in fiscal 2021 were to be based on land prices as of Jan. 1 this year and a number of other factors.
Land prices were on the rise nationwide as of January, but dropped over subsequent months in many areas because of the spread of the coronavirus. Tax relief measures were therefore made part of the agenda for fiscal 2021 tax revisions.
Under the new measure proposed by the government and the ruling parties, all commercial, residential and agricultural land whose property taxes had increased as of July will be charged the same amount in fiscal 2021.
If the property taxes on land had decreased as of July, that will be reflected in the fiscal 2021 taxes.
Property taxes are levied by municipalities, except in Tokyo's 23 wards, where the taxes are charged by the metropolitan government.
Property tax revenue in fiscal 2019 totaled about 9 trillion yen, or about 20% of local tax revenue, and is the main source of funding for local governments. This special measure is expected to result in a drop of tens of billions of yen in local tax revenue.
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