TOKYO: Japan will extend a housing tax incentive by one year, allowing a deduction for those scheduled to move into a new home by the end of 2022 as part of efforts to ease economic strain caused by COVID-19, according to a ruling party tax plan seen by Reuters.
The mortgage tax break is among a batch of tax measures in an annual revision of the tax code due to be approved on Thursday by the ruling Liberal Democratic Party (LDP) and its coalition ally, the Komeito party.
The mortgage tax breaks were originally introduced in October 2019 to cushion the blow from a sales tax hike adopted at that time, for those home buyers who would move into a new home by the end of 2020.
Earlier this year, the year-end deadline was extended by one year to end-2021 to ease the pain from the coronavirus outbreak.
Among other requirements, a lower cap on the floor space would be reduced to 40 square metres (430 sq ft) from the current 50 square metres (538 sq ft), while those who buy a home with a floor space of 40-50 square metres would face an income limit of up to 10 million yen to qualify for the extended tax break, the plan showed.
Those home buyers who would apply for the extended tax break should enter a contract between October this year to end-September 2021.
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