For information on these taxes, please refer here.<\/a><\/p>\nHowever, compared to individuals, if you purchase your own residential property in the name of a company, it can be considered as the company renting the property to its senior executives, allowing more items to be classified as expenses and potentially achieving tax reduction effects in terms of corporate tax.<\/p>\n
The following expenses can be listed as expenses for real estate purchased by a company:<\/p>\n
Purchase costs:<\/strong> Costs, registration fees, etc. related to purchasing real estate
\nManagement expenses:<\/strong> Costs related to management and maintenance, repair costs etc.
\nInsurance premiums:<\/strong> Fire insurance premiums, earthquake insurance premiums
\nInterest costs:<\/strong> Interest costs when borrowing in the name of the company
\nDepreciation expenses:<\/strong> Depreciation expenses calculated based on the useful life of the property<\/p>\nHowever, since living in a property registered under one’s own company can be categorized as part of employee benefits, it may increase the individual income tax amount. If you purchase property in the name of a company, it is recommended to pay rent to the company to reduce the individual tax burden.<\/p>\n
If the real estate purchased in the name of the company is used for investment and incurs a loss, the loss amount can be carried forward for 10 years (in the case of individuals, it can only be carried forward for 3 years), reducing the annual corporate income and thereby alleviating the corporate tax burden. Additionally, if there was a profit in the previous fiscal year, the loss in the current year can offset the profit from the previous year, resulting in a partial refund of the corporate tax already paid in the previous year.<\/p>\n
One of the drawbacks of purchasing property in the name of a company is the inability to enjoy mortgage loans. Mortgage loan deductions are for personal income tax. For a company, mortgage loan deductions cannot be utilized. Moreover, mortgage loans are generally provided to individuals, and corporations cannot obtain mortgage loans. Therefore, when purchasing residential real estate, a company may need to use commercial loans, which may result in higher interest rates compared to personal loans. However, the interest can be deducted as an expense.<\/p>\n
Comparison of Taxation for Individuals and Companies When Selling Property<\/h2>\n
When you sell property and make a profit,
\nFor individuals: “Capital Gains Tax” is paid.
\nFor companies: “Corporate Tax” is paid.<\/p>\n
The taxation method for individual “capital gains” is called separate taxation, where “capital gains” and “other income” are considered separately.
\nThe capital gains tax rate varies depending on the period the property was held for sale.<\/p>\n
Long-term capital gains (held for more than 5 years when sold)20%~20.315%Income Tax 15%
\nResident Tax 5%
\nSpecial Reconstruction Income Tax 0.315%<\/p>\n
\n\n\n| Long-term capital gains (held for more than 5 years when sold)<\/td>\n | 20%~20.315%<\/td>\n | Income Tax 15%
\nResident Tax 5%
\nSpecial Reconstruction Income Tax 0.315%<\/td>\n<\/tr>\n |
\n| Short-term capital gains (held for 5 years or less when sold)<\/td>\n | 39%~39.63%<\/td>\n | Income Tax 30%
\nResident Tax 9%
\nSpecial Reconstruction Income Tax 0.63%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\u203bTax rates are subject to change due to Japanese policies. The special reconstruction income tax will be levied until December 31, 2037.<\/p>\n As mentioned above, individuals who hold property for more than 5 years have a lower tax rate. Compared to corporate tax, if the holding period exceeds 5 years from January 1 of the year the real estate is sold, the individual tax rate is more advantageous. If the holding period is less than 5 years, the corporate tax is more favorable. It is important to note that the calculation of the holding period is from the date of purchasing the property to January 1 of the year the property is sold (not the date of sale itself).<\/p>","protected":false},"featured_media":43291,"template":"","categories":[41],"tags":[69],"class_list":["post-43274","wealthpark","type-wealthpark","status-publish","has-post-thumbnail","hentry","category-articles","tag-propertymarket"],"acf":[],"_links":{"self":[{"href":"https:\/\/wealth-park.com\/ja\/wp-json\/wp\/v2\/wealthpark\/43274","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wealth-park.com\/ja\/wp-json\/wp\/v2\/wealthpark"}],"about":[{"href":"https:\/\/wealth-park.com\/ja\/wp-json\/wp\/v2\/types\/wealthpark"}],"version-history":[{"count":10,"href":"https:\/\/wealth-park.com\/ja\/wp-json\/wp\/v2\/wealthpark\/43274\/revisions"}],"predecessor-version":[{"id":46882,"href":"https:\/\/wealth-park.com\/ja\/wp-json\/wp\/v2\/wealthpark\/43274\/revisions\/46882"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wealth-park.com\/ja\/wp-json\/wp\/v2\/media\/43291"}],"wp:attachment":[{"href":"https:\/\/wealth-park.com\/ja\/wp-json\/wp\/v2\/media?parent=43274"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wealth-park.com\/ja\/wp-json\/wp\/v2\/categories?post=43274"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wealth-park.com\/ja\/wp-json\/wp\/v2\/tags?post=43274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} |