TOKYO, Nov 30, Japan's ruling Liberal Democratic Party LDP lawmakers are considering the possibility of reducing the exemption on mortgages through the tax-code revision for the next fiscal year starting April 2022, a senior party official said on Tuesday.
Under the current mortgages tax break, 1% of outstanding housing loans are exempted from taxation for up to 10 years, as a result of the October. 2019 sales tax hike.
The tax breaks for mortgages are one of the main topics for debates at the year-end tax-code revision to be compiled by the ruling coalition and government, and also includes measures to cope with COVID 19 pains, such as tax breaks to encourage wage hikes.
The tax exemptions on mortgages are more expensive than the interest rates home-buyers pay on loans, which is why lawmakers are looking into a possibility of reducing the 1% tax exemption to 0.7%.
Many people said we have no choice but to reduce the 1% exemption rate, but that the 10 year period must be extended if the rate is brought down, LDP tax panel chief Yoichi Miyazawa told reporters on Tuesday.
We can't afford to give a boost to households forever.