Land prices in areas devastated by the March 11 disasters have plummeted in terms of inheritance and donation tax calculations, and are effectively worthless in the immediate area of the Fukushima nuclear disaster, the government said Tuesday in releasing new price adjustment rates.
The rate stands at 0.2 for locations in Miyagi Prefecture hit by the tsunami, indicating an 80 percent fall in land prices, the National Tax Agency said.
For the vicinity of the Fukushima No. 1 nuclear power plant, the agency said it assigned a rate of zero because it is difficult to make a determination. This means land in the area has no value in the absence of transactions.
Although the agency assigned the negative adjustment rates to reduce the burden on taxpayers, the rates are expected to affect future land transactions.
They will be applied to people who acquired land through inheritance or donation prior to March 11 and were required to file tax returns by that date or later.
The rates cover disaster-affected locations in 10 prefectures, including Iwate, Miyagi and Fukushima, which were hit the hardest by the disasters. They cover around 65,000 sq. km, accounting for 17.1 percent of Japan’s total land.
The tax agency based the rates on such factors as the scale of destruction, damage to essential services and the adverse impact on a region’s image.
The rates range from 0.2 to 0.3 for coastal zones of Miyagi Prefecture and 0.3 for similar zones in Iwate and Fukushima prefectures.
Some locations in Urayasu, Chiba Prefecture, where liquefaction caused by the earthquake destroyed roads and water and gas mains, were assigned rates of 0.6.
After the 1995 Kobe earthquake, the lowest land price adjustment rate was 0.75, indicating a maximum land price fall of 25 percent. Negative adjustment rates were set at the time for around 2,000 sq. km.