Mortgage tax deduction
Eligibility, occupancy, property standards, first-year filing, and annual changes.
The housing-loan deduction is an income-tax credit based on your qualifying year-end mortgage balance (a 0.7% framework); the 2026 rules extend qualifying occupancy from 2026–2030, with a ¥20 million income ceiling and floor-area, energy, and occupancy conditions — file a return in the first year.
Key points
- An income-tax credit based on the qualifying year-end mortgage balance (0.7% framework).
- The 2026 rules extend qualifying occupancy from 2026 through 2030.
- The general income ceiling is ¥20 million, with floor-area and energy conditions.
- File a tax return in the first year to claim it.
How the deduction works
The mortgage tax deduction (住宅ローン減税) is an income-tax credit based on your qualifying year-end mortgage balance and conditions, under a 0.7% framework. Japan’s 2026 reform extended the deduction for five years for qualifying occupancy from 2026 through 2030, expanded treatment for qualifying energy-efficient existing homes, and extended certain existing-home deductions to 13 years. The balance ceiling, floor-area test, household addition, energy category, disaster-zone rule, income ceiling, and period must be checked for your specific property and occupancy year, because the rules are detailed and change annually.
Eligibility and first-year filing
Eligibility is not automatic. The general applicable-income ceiling is ¥20 million, with stricter conditions for some 40–50 square meter homes, and not every new home qualifies — energy, floor-area, occupancy, and other rules apply, though a used home can qualify and 2026 reforms expanded treatment for qualifying efficient existing homes. You generally must file a tax return in the first year to claim the credit; in later years an employee may claim it through year-end adjustment. Because the details shift annually, confirm the current rules for your occupancy year with the National Tax Agency or a tax accountant.
Key points to carry away: An income-tax credit based on the qualifying year-end mortgage balance (0.7% framework); The 2026 rules extend qualifying occupancy from 2026 through 2030; The general income ceiling is ¥20 million, with floor-area and energy conditions; File a tax return in the first year to claim it. Use the linked guides and calculators for the full decision, and confirm anything material with the lender, a licensed broker, a judicial scrivener, or a tax accountant before you act.
Who this is for
- New homeowners claiming the credit
- Buyers checking eligibility
What this is not
- A tax-filing substitute
- The rules change annually and eligibility is conditional; confirm the current rules for your occupancy year.
Frequently asked questions
What is the mortgage tax deduction?
An income-tax credit based on your qualifying year-end mortgage balance (a 0.7% framework), subject to conditions.
Is the 2026 mortgage deduction automatic?
No; eligibility and filing requirements must be met, and you generally file a return in the first year.
Is there an income limit for the mortgage deduction?
The general applicable-income ceiling is ¥20 million, with additional floor-area conditions.
Must I file a tax return in the first year?
Generally yes for an initial mortgage-credit claim; later years an employee may claim it through year-end adjustment.