Help Understanding Housing Tax Deductions

[judomarshall]

Hi all,

Long-time lurker on this forum. Used to post, but work has gotten in the way. Thanks for the great resource!

I have some questions regarding housing tax credits for home owners and I was wondering if you all could help me out.

I am considering buying an used home, and I am wondering about various tax credits as well as deductions in the mortgage interest rate.
From what I understand, a house can qualify for tax deductions if a house passes certain earthquake safety standards.
How does one go about having an used home inspected to see whether it meets requirements?
The home we are looking at is wood framed, and built in 1970. However, it was remodeled 3 years ago and the density of the walls on the north side were increased and double-paned windows were also installed.

The real estate agent didn't seem to know how to answer my question, since not many used homes are remodeled in this way in Japan.
Would it be worth it to pursue having the house receive certification, or does this tax deduction mostly just pertain to newly built houses?

Thanks in advance!

[ricardo]

“Built in 1970...”

Knock the bastard down, sort your grammar out, and build a new one.

[RetireJapan]

Our manshon was just over 25 years old when we bought it, which disqualified it from the mortgage interest tax benefit. We could have tried to get it certified, but didn't bother as the mortgage is pretty small.

[judomarshall]

Thanks, this is what I am gathering as well. Looks like the effort might end up being too much considering the chances of getting certified in the end are pretty slim to begin with. I guess I will just have to invest wisely to make up for the loses in interest on the mortgage.

[ReFire]

I'm posting a new question under this thread because my question is related.

I just learned of a US tax deduction for structural depreciation of investment and rental properties. You can get a tax break for your investment/rental properties getting old and crummy. The deduction caught my attention because structures can depreciate even as the value of the property as a whole appreciates. Despite the overall value going up, there can still be an opportunity for a tax deduction.

Does anyone know of a similar Japanese tax deduction or have a suggestion for further research on this topic?

(The US deduction is IRS publication 527 if anyone is interested.)

[SARS]

You can depreciate overseas property and offset it against rental income.

It used to be the case that you could offset depreciation against all income, but this rule changed recently so now you can only offset against rental income.

My understanding is that you can still offset Japanese investment property depreciation against all income, but not up to date on this.

https://www.grantthornton.jp/en/library/GMS/20200107/