Tokyo, Dec. 6 (Jiji Press) — The Japanese government and ruling camp are considering reducing the tax exemption rate for home loan borrowers to 0.7 percent from the current 1 percent, sources close to the government said on Monday. their talks.
In a low interest rate environment, home loan rates are less than 1% per annum in many cases, giving borrowers unduly preferential treatment under the current system. The reduction in the tax exemption rate aims to correct the problem, the sources said.
Government and ruling coalition officials aim to include the reduction in annual tax system reform proposals for the 2022 financial year, which begins in April, the sources said.
Currently, 1% of the outstanding balance of home loans at the end of a calendar year is deducted primarily from the income tax of eligible borrowers.
In order to cushion the impact of the reduction, the duration of the tax benefits will be set at 13 years in 2022 and 2023, compared to 10 years in principle and 13 years at the most currently, the sources said. The period will be set at 10 years in 2024 and 2025, they said.
[Copyright The Jiji Press, Ltd.]