Buy a house in the Japanese countryside and get up to ¥1 million yen in points from the gov’t and other 2021 home buyer incentives

December 7, 2020

The Japanese government plans to set up an incentive system starting in the spring of 2021 to encourage people to migrate to rural areas in Japan in exchange for up to ¥1 million in points that can be redeemed for home appliances.

The program is targeted to residents of Tokyo’s 23 Wards and those who work for companies based in the 23 Wards. Tokyo 23 Wards residents, regardless of nationality, can qualify to receive incentive points if they buy a newly constructed home in a rural area, that has been certified as energy-saving. You can also be eligible to receive points if you buy a previously owned home, even if it does not have energy-saving certification. Points can be redeemed for home appliances and other miscellaneous goods.

According to the Ministry of Internal Affairs and Communications’ Basic Resident Population Migration report, Tokyo has seen four consecutive months (July to October) of population outflow to other prefectures. Many companies have been setting up infrastructure and policies to encourage telecommuting, so this outbound trend is expected to continue. Please see this article for a detailed breakdown of population growth and decline by prefecture thus far in 2020, for the resident foreigner population of Japan: Where foreigners in Japan are moving.

Receive points for re-modeling homes in the city

For people who aren’t able to take up the offer to migrate to the countryside, the government also plans to introduce a system to encourage homeowners to remodel their existing city-center homes to support energy-saving and to create home offices. It is expected that up to ¥1 million in points can be earned for qualifying re-modeling projects.

Subsidies for re-modeling homes to promote telecommuting

The incentive point program is separate from a previously announced program by the Ministry of Land to establish a system in 2021 to subsidize home re-modeling costs in order to encourage people to telecommute. The government aims to provide a subsidy of up to one-third the cost (or a maximum of ¥1 million [$9,500 USD]) to homeowners who renovate their home in order to create or improve their telecommuting environment. Remodels of both detached houses and condominiums are eligible for the subsidy, which would cover such things as extensions, soundproofing, and installation of partitions.

Other homebuyer incentives to be aware of

Cash Back Housing Benefit (Sumai Kyufukin) for Home Buyers

When the consumption tax was previously increased from 5% to 8% (in 2014), the government introduced a “cash back” incentive for lower-income home buyers who might not otherwise benefit very much from the mortgage deduction explained above. This benefit is called “Sumai Kyufukin” （すまい給付金). In this incentive scheme, home buyers get a certain amount of cash back, depending on their income level. When the consumption tax increased to 10% on October 1, 2019, the maximum amount of cash back will increase to 500,000JPY from 300,000JPY.

1% mortgage loan tax deduction on income tax returns

The home mortgage loan deduction currently lets homeowners with outstanding loan balances deduct 1% of the year-end mortgage balance from their income tax and resident’s tax.

For an in-depth explanation of the deduction, please see this article: New 2021 mortgage loan tax deduction rules for homeowners in Japan

Declining housing starts

As of October, Japan has seen 16 months of consecutive year-on-year declines in new housing starts, and the various incentive schemes are part of a larger effort to revitalize the housing market.

FAQs About Buying Property in Japan

Can a foreigner buy property in Japan?

Yes. You can buy property in Japan regardless of your nationality or country of origin. There are also no residency requirements for buying real estate in Japan. Securing financing as a resident foreigner is more complicated. For info on financing, please see “Basic Requirements for Getting a Mortgage as a Foreigner in Japan“.

How do I get a property loan as a foreigner in Japan?

Please see this article for information on: Getting a property loan as a foreigner in Japan

What is the process for buying a property in Japan?

Please see our step-by-step guide: Guide to Buying Property in Japan

See how much you can borrow and your monthly payments in yen: Yen Mortgage Loan Calculator

For information about purchase and brokerage fees: Breakdown of real estate purchase fees and taxes in Japan

Need to know: Earthquake building codes and technology in Japan

Lead photo: iStock

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