Land Transaction Tax Measures Extended: 1.5% Registration Tax on Ownership Transfer, Up to JPY 1 Million Deduction on Under-Used Land SalesThe rule that lowers tax when you sell unused land will continue for 3 more years
Under the FY2026 (Reiwa 8) tax reform, the reduced registration and license tax on land ownership transfer registration (1.5% for ownership transfer) is extended by three years, and so is the deduction of up to JPY 1 million from long-term capital gains for individuals who sell under-used land. The reduced tax rate for selling land for quality housing development is also extended by three years.
Key points
- The reduced registration and license tax on land ownership transfer registration is extended three years (April 1, 2026 to March 31, 2029). Ownership transfer registration: 1.5% instead of the standard 2%; trust registration: 0.3% instead of 0.4%
- The measure promoting proper use and management of under-used land is extended three years (January 1, 2026 to December 31, 2028). When an individual transfers certain under-used land, up to JPY 1 million is deducted from long-term capital gains on the land. Covered: land of JPY 8 million or less in urbanization promotion areas, zoned areas and the like, and JPY 5 million or less in other city planning areas
- The under-used land measure applies only where the municipality has confirmed that the land was under-used before the transfer and will be used by the buyer afterward
- The reduced rate on long-term capital gains (the part up to JPY 20 million) from selling land for quality housing development is extended three years (January 1, 2026 to December 31, 2028). The rate is 14% (income tax 10% and resident tax 4%) instead of the standard 20% (15% and 5%). For some projects, transfers of land in certain hazard areas are excluded
What to do in practice
- If you plan to buy land and register it, check the period of the reduced registration and license tax (until March 31, 2029)
- If you plan to sell under-used land, look into the procedure early, since confirmation by the municipality is needed before the sale
If you sell something like an empty lot you are not using and make a profit, you pay tax. But when you sell a low-priced piece of land that meets certain conditions, you can subtract up to 1 million yen from the profit. This rule has been extended by three years, until the end of 2028.
- 1. Unused landYou own land that is hardly used, such as an empty lot
- 2. Check by the cityThe city or town confirms it was unused before and the buyer will use it afterward
- 3. SellYou sell land of 8 million yen or less (5 million yen or less in some places)
- 4. Lower the taxed amountUp to 1 million yen is subtracted from the profit
Points
- When you sell unused land (under-used land), you can subtract up to 1 million yen from the profit that tax is based on
- The tax for registering land (writing the owner in the official book) also keeps a lower rate for three more years
- For the land rule, the city or town must check some conditions before you sell
What the words mean
- Under-used land
- Land that is left alone and not used much, such as an empty lot
- Registration and license tax
- A tax you pay when you register land or a house
- Ministry of Land, Infrastructure, Transport and Tourism (MLIT): MLIT: Outline of the FY2026 (Reiwa 8) tax reform (land ownership transfer registration, under-used land, quality housing land measures)
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.