Local Tax Act

A prefecture or municipality may, in order to defray the expenses of carrying out projects relating to water utilization, projects carried out under the City Planning Act, projects relating to forest roads, and other projects that are to benefit land or forests, impose water utilization and land benefit tax on land or houses that particularly benefit from such a project, with the price or area of the land or houses as the tax base.

The taxable amount of water utilization and land benefit tax (where it is imposed over several years, the total of the taxable amounts for each year) cannot exceed the limit of the benefit that the land or house in question particularly receives from the project referred to in the preceding paragraph.

Where a municipality imposes city planning tax under Article 702, paragraph (1), it may not impose water utilization and land benefit tax to defray the expenses of carrying out the projects carried out under the City Planning Act referred to in paragraph (1).

A municipality may, in order to defray the expenses of joint workplaces, joint warehouses, joint collection centers, sewage treatment facilities and other similar facilities, impose joint facility tax on persons who particularly benefit from such a facility.

The taxable amount of joint facility tax (where it is imposed over several years, the total of the taxable amounts for each year) cannot exceed the limit of the benefit that the taxpayer in question particularly receives from the facility referred to in the preceding paragraph.

A municipality may, in order to defray the expenses of developing roads, waterways and other public facilities specified by Cabinet Order that become necessary in connection with residential land development (meaning converting land other than building land into building land by altering the division, shape or character of that land, or diverting land other than building land to building land; the same applies hereinafter in this Article) (hereinafter in this Article referred to as "public facilities"), impose residential land development tax, with the area of the building land relating to that residential land development (excluding the area of the portion to be provided for public use) as the tax base, on a person who carries out residential land development on the basis of title within an area specified by Municipal Ordinance of the municipality as an area in which the development of public facilities is required, within an urbanization promotion area prescribed in Article 7, paragraph (1) of the City Planning Act (where city planning concerning the area division prescribed in that paragraph has not been established for the city planning area, an area designated as a residential land development project regulation area pursuant to Article 3, paragraph (1) of the former Act on Residential Land Development Projects (Act No. 160 of 1964)) of the area of the municipality that has been designated as a city planning area pursuant to Article 5 of the City Planning Act (hereinafter in this paragraph referred to as the "city planning area").

The tax rate of residential land development tax is to be specified by Municipal Ordinance of the municipality, taking into account the expenses required for the development of public facilities that become necessary in connection with residential land development, the state of benefit received from those public facilities, and other factors.

Where a person liable for residential land development tax transfers to the municipality free of charge, in accordance with the Municipal Ordinance of that municipality, public facilities that become necessary in connection with that residential land development or land specified by Cabinet Order that is provided for their use, and in other cases specified by Cabinet Order, the mayor of the municipality is to exempt the residential land development tax or, if the amount of residential land development tax has already been paid, to refund the amount equivalent to it.

Where a person liable for residential land development tax has offered to transfer free of charge to the municipality the public facilities or land provided for their use referred to in the preceding paragraph, the mayor of the municipality may, in accordance with the Municipal Ordinance of that municipality, grant a deferral of collection for a period of not more than one year in accordance with the rules of Article 15, paragraph (1).