Mortgage tax credit in Japan
First-year filing, later payroll years, qualifying homes, energy standards, and documents.
The housing-loan credit reduces your tax by a percentage of the year-end loan balance for a qualifying owner-occupied home; you must file a return the first year with property, loan, and energy documents, then employees can use year-end adjustment in later years.
Effective: 2026-01-01 to 2026-12-31
Professional review pending — treat as draft and confirm with the authorities.
Key points
- It is a tax credit (reduces tax directly), not a deduction.
- The first year requires a final return with supporting documents.
- Later years can run through payroll year-end adjustment.
- Energy performance, construction date, floor area, income, and loan limits all matter.
The first year
In the first qualifying year you file a return with the loan balance certificate, property registry, purchase/construction contracts, and — for new builds — energy-standard documents. For homes occupied in 2024–2025 many categories use 0.7% of the eligible year-end loan balance, with limits and periods that depend on construction date, energy performance, floor area, family status, and property category.
Later years and conditions
From the second year, employees receive a statement and can apply the credit through year-end adjustment. Not every new house qualifies — a home failing energy or construction-date conditions can receive no new-build credit even though it is owner-occupied. Income and debt ceilings also apply, so confirm the current-year rules for your occupancy year.
Who this is for
- New homeowners with a mortgage
- People planning a home purchase
What this is not
- Rental/investment property (see rental interest)
- Energy and construction-date conditions can disqualify a new build; verify before you buy.
Frequently asked questions
Do I need to file a tax return in Japan?
Many employees do not, because tax is settled by year-end adjustment (年末調整). You generally must file (確定申告) if you have side income over ¥200,000, two or more employers, self-employment income, sizeable investment or crypto gains, or you want to claim deductions like large medical costs or a first-year mortgage credit. Filing season is Feb 16 – Mar 15 via e-Tax. When unsure, check the NTA guidance or ask a 税理士.