Five-year extension confirmed in the tax reform framework
The Ministry of Finance’s FY2026 tax reform outline provides for a five-year extension of the housing loan tax credit after revising several eligibility rules. A major feature is stronger treatment of existing homes with higher energy performance. The reform raises borrowing limits for qualifying certified and ZEH-level energy-efficient existing homes and expands certain additional measures for households with children, while also revising floor-area requirements.
Energy performance becomes more important in the resale market
Price, age, location and seismic standards have traditionally been central criteria when comparing existing homes. Tax policy now gives energy performance a larger role as well. Because the amount of tax relief can differ according to the property category and buyer eligibility, two homes with similar purchase prices can have different after-tax costs. Documentation proving building performance may therefore become more important in resale transactions.
Foreign buyers must meet the relevant tax and occupancy conditions
The mortgage tax credit is not automatically available to everyone who buys residential property in Japan. It is an income-tax credit and eligibility depends on matters such as occupancy, income, property use, floor area and loan conditions. Overseas residents and foreign nationals spending limited time in Japan should therefore verify their individual tax status. The system is designed for qualifying residential ownership rather than the acquisition of investment property.