Japan Home Loan Tax Deduction (住宅ローン控除)

The Japan Housing Loan Tax Credit (住宅ローン控除, jutaku loan kojo) calculator helps homebuyers in Japan estimate the annual tax credit they can claim on their income tax for purchasing or constructing an owner-occupied residence using a mortgage loan. The housing loan tax credit is one of Japan's most generous individual tax incentives. For new homes purchased from 2022 onward, the credit is 0.7% of the outstanding mortgage loan balance (year-end balance) deducted directly from income tax (not merely from taxable income) for 13 consecutive years. For used homes, the credit applies for 10 years. The maximum eligible loan amount depends on the energy efficiency classification of the home: up to ¥50 million for ZEH (net-zero energy house), ¥40 million for high energy efficiency, ¥30 million for standard new construction, and ¥21 million for long-term high-quality housing. Income limits apply: the taxpayer's gross income must be ¥20 million or below in the year the credit is claimed. If the credit exceeds the income tax payable in a given year, the excess can reduce residence tax (juminzei) up to the lesser of ¥97,500 or 5% of the previous year-end loan balance. Understanding this credit is critical for buyers calculating their true net monthly cost after tax benefits, which can be substantial — a ¥40M mortgage can generate up to ¥280,000 in annual tax credit for 13 years.

Calkulon makes complex calculations simple — built for students and everyday problem-solvers.

1. 1Confirm the home qualifies: new or used, energy efficiency classification, floor area ≥50m², occupied as primary residence.
2. 2Apply for the credit in your first year via the annual tax return (kakuteishinkoku) with a certificate from the legal affairs bureau.
3. 3In subsequent years, the credit is applied automatically via the year-end adjustment for salaried workers.
4. 4Calculate the year-end outstanding mortgage balance each December 31st.
5. 5Multiply the balance by 0.7% to determine the annual credit amount.
6. 6Apply the credit to reduce income tax first; any excess reduces juminzei up to ¥97,500.
7. 7Repeat for all eligible years (13 for new, 10 for used).

• !Forgetting to file the kakuteishinkoku in the first year — salaried workers must file a full tax return in year 1 even though subsequent years are handled via year-end adjustment.
• !Assuming the credit applies to the full mortgage amount when the home type caps the eligible amount below the actual loan.
• !Not checking income each year — exceeding ¥20M in any year forfeits the credit for that year only.
• !Not understanding that excess credit above income tax reduces juminzei — many buyers don't track this and miss the resident tax reduction.
• !Applying the credit to a non-primary residence or vacation home — only the main dwelling qualifies.