Japan Housing Loan Tax Deduction Calculator — 住宅ローン控除

Japan's 住宅ローン控除 (jutaku loan deduction) is a powerful tax credit: 0.7% of your outstanding year-end loan balance is credited directly against your income tax every year for up to 13 years (new builds) or 10 years (used homes).

Unlike most countries where the deduction is based on interest paid, Japan's credit is based on the remaining principal. A ¥30M loan at 1.5% costs ¥450,000/year in interest — but the annual credit is ¥210,000 (0.7% × ¥30M), covering nearly half the interest cost.

• New energy-efficient homes (ZEH-standard or higher): ¥50M cap → max credit ¥350,000/year
• Other new builds: ¥30M cap → max credit ¥210,000/year
• Used / existing housing: ¥21M cap → max credit ¥147,000/year

These caps apply to loans taken for homes purchased 2022–2025. Rules are updated by the National Tax Agency (NTA) periodically.

• Annual gross income must not exceed ¥20,000,000
• The home must be your primary residence — occupied within 6 months of acquisition
• Floor area must be at least 50 m² (40 m² for incomes ≤¥10M)
• The loan must have a repayment period of 10 years or more
• Previously purchased used homes must meet minimum habitability or renovation standards

In the first year, file a確定申告 (kakutei shinkoku / tax return) with the NTA between February 16 and March 15. In subsequent years, the credit is handled automatically via 年末調整 (year-end adjustment) at your employer — no annual filing needed.

The credit reduces income tax first. Any unused portion (up to ¥97,500/year) can be credited against your municipal residents tax in the following year.

Why does Japan base the credit on balance, not interest?
Japan's system was designed to encourage homeownership and stimulate the economy, so it ties the benefit to the loan itself rather than its cost. This means the credit remains substantial even when interest rates are very low (Japan has had near-zero rates for decades).

Is BeastyTax free?
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