Local Tax Act

Prefectures may not impose real property acquisition tax on the acquisition of the following real property:

Acquisition of real property by inheritance (including a comprehensive bequest and a bequest made by a decedent to an heir);

Acquisition of real property by a merger of juridical persons or by a split specified by Cabinet Order;

Acquisition of real property in the case where a juridical person makes a capital contribution in kind (including the transfer of assets equivalent to the amount of the contribution in the case of a cash contribution) in order to establish a new juridical person (limited to cases specified by Cabinet Order);

Acquisition of real property by partition of property in co-ownership (excluding the acquisition of the portion exceeding the proportion of the share in that property in co-ownership held by the acquirer of that real property before the partition);

Acquisition by a new stock company, new cooperative financial institution, or new mutual company of real property in the case where, pursuant to the provisions of Article 183 of the Corporate Reorganization Act (Act No. 154 of 2002) (including as applied mutatis mutandis under Article 104 or Article 273 of the Act on Special Measures for the Reorganization Proceedings of Financial Institutions (Act No. 95 of 1996; hereinafter in this item referred to as the "Financial Institutions Reorganization Special Measures Act")), Article 103, paragraph (1) of the Financial Institutions Reorganization Special Measures Act (including as applied mutatis mutandis under Article 346 of the Financial Institutions Reorganization Special Measures Act), or Article 272 of the Financial Institutions Reorganization Special Measures Act (including as applied mutatis mutandis under Article 363 of the Financial Institutions Reorganization Special Measures Act), the real property that is to be transferred from a stock company, a cooperative financial institution (meaning a cooperative financial institution prescribed in Article 2, paragraph (2) of the Financial Institutions Reorganization Special Measures Act; the same applies hereinafter in this item), or a mutual company (meaning a mutual company prescribed in Article 2, paragraph (6) of the Financial Institutions Reorganization Special Measures Act; the same applies hereinafter in this item) to the new stock company, new cooperative financial institution, or new mutual company is specified in a reorganization plan;

Acquisition of real property in the case where trust property is transferred from a settlor to a trustee (excluding the acquisition of real property in the case where that transfer of trust property falls under the main clause of Article 73-2, paragraph (2));

Acquisition of real property in the case where trust property is transferred from the trustee to the beneficiary (limited to a person falling under any of the following) under a trust in which only the settlor has been the beneficiary of the principal of the trust property continuously since the time the trust took effect;

a person who has been the settlor continuously since the time that trust took effect;

a person who has inherited, as prescribed in item (i), from the settlor at the time that trust took effect;

where the settlor at the time that trust took effect has ceased to exist by merger, the juridical person surviving that merger or the juridical person established by that merger;

where the settlor at the time that trust took effect has carried out a split specified by Cabinet Order as prescribed in item (ii), the juridical person established by that split or the juridical person that succeeded to the business by that split.

Acquisition of real property in the case where the original settlor (meaning the original settlor prescribed in Article 224 of the Act on the Securitization of Assets, and limited to a person who has been the settlor continuously since the time that specified purpose trust took effect) of a specified purpose trust prescribed in Article 2, paragraph (13) of the Act on the Securitization of Assets that satisfies all of the following requirements buys back, at the time of termination of the trust contract relating to that specified purpose trust, real property belonging to the trust property of that specified purpose trust (limited to that which the trust company, etc. entrusted with the trust, prescribed in Article 2, paragraph (16) of the Act on the Securitization of Assets, acquired from that original settlor as trust property of that specified purpose trust at the time that specified purpose trust took effect and leased to that original settlor);

in the trust contract relating to that specified purpose trust, provision is made for bond-type beneficial interest prescribed in Article 230, paragraph (1), item (ii) of the Act on the Securitization of Assets (referred to as "bond-type beneficial interest" in (c)), and matters specified by Cabinet Order as matters concerning the redemption of the principal of that bond-type beneficial interest are provided for;

the specified assets (meaning specified assets prescribed in Article 2, paragraph (1) of the Act on the Securitization of Assets) placed in trust by that original settlor satisfy the requirements specified by Cabinet Order as having a material effect on investors' investment decisions;

continuously since that specified purpose trust took effect, only that original settlor and persons who hold the bond-type beneficial interest of that specified purpose trust are beneficiaries of the principal of the trust property of that specified purpose trust.

Acquisition of real property by the new trustee in the case where there has been a change of the trustee of a trust;

Acquisition of real property in the case where real property for which permission for payment in kind has been granted on the basis of approval under the provisions of Article 46, paragraph (1) of the Inheritance Tax Act (Act No. 73 of 1950) is transferred to the person who received that permission for payment in kind;

Acquisition of a house that is a common portion under Article 2, paragraph (4) of the Act on Building Unit Ownership that does not accompany the acquisition of an exclusively owned portion under paragraph (3) of that Article (excluding acquisition by the construction of that house);

Acquisition of real property in the case where a company transfers real property based on a contract for the transfer of the whole of its insurance policies pursuant to the provisions of the Insurance Business Act;

Acquisition of real property in the case where, due to the extinction of the claim secured by property that is the object of security by transfer (hereinafter in this Section referred to as "property transferred as security"), that property transferred as security is transferred, within two years from the date of establishment of that property transferred as security, from the holder of the right to the property transferred as security (hereinafter in this Section referred to as the "holder of property transferred as security") to the grantor of the property transferred as security (excluding a new grantor in the case where the grantor has been replaced; the same applies hereinafter in this Section);

Acquisition of land in the case where a production forestry cooperative receives a capital contribution in kind from a person qualified to be its member;

Acquisition of real property in the case where the Okinawa Development Finance Corporation carries out services specified by Cabinet Order among the services prescribed in Article 19, paragraph (1), item (iii) of the Okinawa Development Finance Corporation Act (Act No. 31 of 1972);

Acquisition of real property related to the collection of loans by the incorporated administrative agency Japan Housing Finance Agency or the Okinawa Development Finance Corporation (including the acquisition of a dwelling for which construction work has been completed after the incorporated administrative agency Japan Housing Finance Agency or the Okinawa Development Finance Corporation acquired it while under construction);

Acquisition of real property in the case where the Urban Renaissance Agency, the Organization for Small and Medium Enterprises and Regional Innovation, JAPAN, a Local Housing Corporation, or a public land development corporation acquires real property that it transferred, through cancellation of the transfer contract relating to that real property or under a special agreement for repurchase.

acquisition of real property in the case where an agricultural cooperative or a federation of agricultural cooperatives succeeds to rights under Article 70, paragraph (1) of the Agricultural Co-operatives Act;

acquisition of real property in the case where a fishery cooperative, fishery production cooperative or federation of fishery cooperatives, or a fishery processing cooperative or federation of fishery processing cooperatives, succeeds to rights under Article 91-2, paragraph (1) of the Fishery Industry Cooperative Act (including as applied mutatis mutandis pursuant to Article 100, paragraph (5) of that Act);

acquisition of real property in the case where a forestry cooperative or a federation of forestry cooperatives succeeds to rights under Article 108-3, paragraph (1) of the Forestry Cooperative Act (Act No. 36 of 1978);

acquisition of real property in the case where an agricultural mutual relief association succeeds to rights under Article 73, paragraph (2) of the Agricultural Insurance Act;

acquisition of real property (limited to real property confirmed under Article 93, paragraph (2) of the Deposit Insurance Act as appropriate to be held as an asset by the successor bank) by a successor bank prescribed in Article 2, paragraph (13) of the Deposit Insurance Act (including a successor agreement bank prescribed in Article 15-2, paragraph (3) of the Supplementary Provisions of that Act which is deemed to be a successor bank under that paragraph), through a transfer of business or the like prescribed in Article 2, paragraph (13) of that Act from a financial institution under management prescribed in Article 2, paragraph (12) of that Act, which it carries out upon receiving a decision set forth in Article 91, paragraph (1), item (ii) of that Act pursuant to paragraph (1) or (2) of that Article;

acquisition of real property by a specified successor financial institution, etc. prescribed in Article 126-34, paragraph (3), item (v) of the Deposit Insurance Act (including a successor agreement bank prescribed in Article 15-2, paragraph (3) of the Supplementary Provisions of that Act which is deemed to be a specified successor bank under that paragraph), through a specified transfer of business or the like prescribed in Article 126-34, paragraph (1) of that Act from a specially supervised financial institution, etc. prescribed in Article 126-3, paragraph (2) of that Act, which it carries out upon receiving a decision set forth in Article 126-34, paragraph (1), item (ii) of that Act pursuant to paragraph (1) or (2) of that Article;

acquisition of real property by a successor insurance company prescribed in Article 260, paragraph (6) of the Insurance Business Act through a transfer of insurance policies from a failed insurance company prescribed in Article 260, paragraph (2) of that Act, which it carries out upon receiving a decision set forth in Article 270-3-2, paragraph (6), item (ii) of that Act, made by the Policyholders Protection Corporation pursuant to that paragraph.

If necessary for an examination concerning the assessment and collection of the real property acquisition tax, a prefectural tax collection official may question the persons listed below, or inspect the books and documents of the persons in items (i) to (iii) (including, where electronic or magnetic records (meaning records made in electronic form, magnetic form or any other form that cannot be perceived by human senses, which are used for information processing by a computer) have been made or kept in lieu of making or keeping them, those electronic or magnetic records; the same applies in items (i) and (ii) of paragraph (1) of the following Article) and other articles, or request the presentation or submission of those articles (including copies thereof).

a person liable for tax or a person found to have tax liability;

a person found to have the right to receive money or goods from a person listed in the preceding item;

a person found to have delivered a house acquired by a person listed in item (i) to that person;

a person other than those listed in the preceding three items who is found to be directly related to the assessment and collection of the real property acquisition tax in question.

A successor corporation in a company split (meaning a corporation that has had assets and liabilities transferred to it by a splitting corporation in a company split; the same applies hereinafter in this paragraph) in a company split in which a person listed in item (i) of the preceding paragraph is the splitting corporation (meaning a corporation that has transferred its assets and liabilities through a company split; the same applies hereinafter in this paragraph), and a splitting corporation in a company split in which a person listed in that item is the successor corporation in a company split, are included in the persons found to have the right to receive money or goods prescribed in item (ii) of the preceding paragraph.

In the case referred to in paragraph (1), the tax collection official in question must carry an identification card certifying the official's status and present it when requested by a person concerned.

A prefectural tax collection official may, as provided by Cabinet Order, retain the articles submitted pursuant to the provisions of paragraph (1).

Examinations concerning delinquent tax collection procedures for the real property acquisition tax are governed by the provisions of Article 73-36, paragraph (6), notwithstanding the provisions of paragraph (1).

The authority of a prefectural tax collection official under paragraph (1) or (4) must not be construed as having been granted for the purpose of a criminal investigation.