To ease the financial burden due to the increase of consumption tax rate effective next April [1], certain types of housing reforms such as renovation work, seismic retrofitting, extension, structural alteration or partial demolition may be qualified for special deduction applicable to a longer period or a greater amount. The special deduction offsets against an individual income tax liability.
1. Special deduction for specified renovation work
The applicable period of special deduction for specified renovation work of the existing housing has been extended for five years from 31/12/2012 to 31/12/2017 along with the following changes:
New rules:
Old rules:
2. Special deduction for seismic retrofitting work
The applicable period of special deduction for renovation work of the existing housing has been extended for four years from 31/12/2013 to 31/12/2017 along with the following changes:
New rules:
3. Special deduction for specified extension, structural alteration or partial demolition work (EAD)
The applicable period of special deduction for renovation work of the existing housing has been extended for four years from 31/12/2013 to 31/12/2017 along with the following changes:
New rules:
[1] The consumption tax increase bill enacted in the summer of 2012, in which a clause stipulated that the consumption tax rate will be increased from the current 5 percent to 8 percent starting from 1 April 2014, and from 8 percent to 10 percent beginning 1 October 2015.