1.What is the fixed asset tax valuation?

One of the most important indicators when considering a property purchase is the fixed asset tax valuation. This value is determined by the local government and notified each April. Typically, it represents about 70% of the market price and serves as the basis for calculating land and building taxes.

2. Impact on taxes

For example, if you own land with a valuation of 30 million yen, the fixed asset tax rate of 1.4% results in an annual tax of 420,000 yen. With the urban planning tax (up to 0.3%), the total can reach 510,000 yen. These figures are critical for estimating long-term holding costs.

3. Practical example

A buyer once considered a wooden apartment with a valuation of 22 million yen and a market price of 32 million yen. Based on the valuation, the annual tax burden was about 300,000 yen. With expected rental income of 3 million yen per year, the balance between costs and returns was favorable, leading to the purchase.

Conclusion

The fixed asset tax valuation is more than a tax figure; it is the foundation for understanding ownership costs. Always verify it before purchase, and make decisions by weighing the tax burden against projected income.