The nation’s land-related taxes should be simplified to spur sluggish real estate sales, the Japan Association of Corporate Executives (Keizai Doyukai) said July 31.
In its proposal on revitalizing land usage and transactions in urban areas, Keizai Doyukai said that the current fixed-asset taxation system should be drastically reviewed and that its tax rate should be decided by each municipal government. The report also urges the government to change the complicated property tax system. There are now numerous taxes for holding real estate such as the land-holding tax, which was introduced during the bubble economy to discourage asset inflation, and the city-planning tax, revenues from which are used for city development projects.
“All these taxes should be abolished and unified into a fixed-asset tax,” said Masatake Matsuda, president of East Japan Railway Co. and chairman of Keizai Doyukai’s land policy committee. “If the land-related tax system is simplified, it will encourage land transactions.”
Municipal governments should also be able to issue bonds to procure necessary funds for developing urban areas and take initiatives in drawing up those projects, the report says. The committee also said that the nation’s collateral auction system should be simplified and more information on properties-to-be-auctioned should be provided to the public.