Act on Special Measures Concerning Taxation

If land or a right existing on land held by an individual (hereinafter referred to in this Subsection as "land, etc.") comes to fall under the case where it is purchased for a specified land readjustment project, etc., then, except where the individual is subject to the provisions of Article 36-2, Article 36-5, Article 37, or Article 37-4 with regard to all or part of the land, etc. that has come to fall under that case during that year (excluding any portion that is subject to the provisions of Article 35), the following provisions apply with regard to the application of the provisions of Article 31 or Article 32 to the transfer of all of that land, etc.:

in Article 31, paragraph (1), the phrase "the amount of long-term capital gains (" is deemed to be replaced with "the amount remaining after deducting 20 million yen (or, where the portion of the amount of long-term capital gains pertaining to the transfer of land, etc. falling under the provisions of Article 34, paragraph (1) is less than 20 million yen, the amount of the portion pertaining to the transfer of the land, etc., and where the provisions of Article 32, paragraph (1) as read with the terms replaced pursuant to the provisions of item (ii) of that paragraph apply, the amount remaining after deducting the amount deducted pursuant to the provisions of that paragraph from 20 million yen or the amount of the portion pertaining to the transfer of the land, etc., whichever is lower) from the amount of long-term capital gains (";

in Article 32, paragraph (1), the phrase "the amount of short-term capital gains (" is deemed to be replaced with "the amount remaining after deducting 20 million yen (or, where the portion of the amount of short-term capital gains pertaining to the transfer of land, etc. falling under the provisions of Article 34, paragraph (1) is less than 20 million yen, the amount of the portion pertaining to the transfer of the land, etc.) from the amount of short-term capital gains (".

The case where land, etc. is purchased for a specified land readjustment project, etc. prescribed in the preceding paragraph means any of the following cases:

where land, etc. is purchased by the State, a local government, the Urban Renaissance Agency, or a Local Housing Corporation (including an organization established by a local government that is specified by Cabinet Order) for use in a project for the improvement of public facilities, the development of residential land, the construction of apartment houses, or the development of buildings and building sites, which any of those persons carries out as a land readjustment project under the Land Readjustment Act, a residential block improvement project under the Urban Housing Supply Promotion Act, a Class 1 urban redevelopment project under the Urban Renewal Act, or a disaster prevention block improvement project under the Act on Promotion of Improvement of Disaster Control Districts in Populated Urban Districts (excluding the case where the provisions of Article 33, paragraph (1), items (iii)-4 through (iii)-6 apply);

where land, etc. within a planned project site prescribed in Article 56, paragraph (1) of the City Planning Act for a Class 1 urban redevelopment project under the Urban Renewal Act is purchased, pursuant to the provisions of that paragraph, by an urban redevelopment association established with the authorization referred to in Article 11, paragraph (2) of the Urban Renewal Act that carries out the Class 1 urban redevelopment project;

where land, etc. within a planned project site prescribed in Article 56, paragraph (1) of the City Planning Act for a disaster prevention block improvement project under the Act on Promotion of Improvement of Disaster Control Districts in Populated Urban Districts is purchased, pursuant to the provisions of that paragraph, by a disaster prevention block improvement project association established with the authorization referred to in Article 136, paragraph (2) of the Act on Promotion of Improvement of Disaster Control Districts in Populated Urban Districts that carries out the disaster prevention block improvement project;

where land, etc. is purchased pursuant to the provisions of Article 12, paragraph (1) of the Act on Special Measures concerning Preservation of Traditional Scenic Beauty in Ancient Capitals (Act No. 1 of 1966), Article 17, paragraph (1) or paragraph (3) of the Urban Green Space Conservation Act (Act No. 72 of 1973), Article 8, paragraph (1) of the Act on Special Measures concerning Countermeasures against Aircraft Noise around Specified Airports (Act No. 26 of 1978), Article 49, paragraph (4) of the Civil Aeronautics Act (Act No. 231 of 1952) (including as applied mutatis mutandis pursuant to Article 55-2, paragraph (3) of that Act), Article 5, paragraph (2) of the Act on Improvement of Living Environment of Areas Around Defense Facilities (Act No. 101 of 1974), or Article 9, paragraph (2) of the Act on Prevention of Damage caused by Aircraft Noise in Areas around Public Airports (Act No. 110 of 1967), or the provisions of any other Act specified by Cabinet Order;

where target land prescribed in Article 13, paragraph (1) of the Act on Special Measures concerning Preservation of Traditional Scenic Beauty in Ancient Capitals is purchased, pursuant to the provisions of paragraph (4) of that Article, by the urban greening support organization referred to in that paragraph (limited to the case where the urban greening support organization satisfies the requirements specified by Cabinet Order, such as being an incorporated public interest association or an incorporated public interest foundation);

where target land prescribed in Article 17-2, paragraph (1) of the Urban Green Space Conservation Act is purchased, pursuant to the provisions of paragraph (4) of that Article, by the urban greening support organization referred to in that paragraph (limited to the case where the urban greening support organization satisfies the requirements specified by Cabinet Order, such as being an incorporated public interest association or an incorporated public interest foundation);

where land designated as an Important Cultural Property pursuant to the provisions of Article 27, paragraph (1) of the Act on Protection of Cultural Properties (Act No. 214 of 1950), land designated as a historic site, place of scenic beauty, or natural monument pursuant to the provisions of Article 109, paragraph (1) of that Act, land within the district designated as a special zone pursuant to the provisions of Article 20, paragraph (1) of the Natural Parks Act (Act No. 161 of 1957), or land within the district designated as a special district pursuant to the provisions of Article 25, paragraph (1) of the Nature Conservation Act (Act No. 85 of 1972) is purchased by the State or a local government (including an organization established by it that is specified by Cabinet Order) (this includes the case where the land designated as an Important Cultural Property or the land designated as a historic site, place of scenic beauty, or natural monument is purchased by the National Institutes for Cultural Heritage, the National Museum of Nature and Science, a local independent administrative agency (limited to one specified by Cabinet Order from among those whose main purpose is the services listed in Article 21, item (vi) of the Local Independent Administrative Agency Act (Act No. 118 of 2003)), or a cultural property preservation and utilization support organization prescribed in Article 192-2, paragraph (1) of the Act on Protection of Cultural Properties (where the land is purchased by the cultural property preservation and utilization support organization, limited to the case where that organization satisfies the requirements specified by Cabinet Order, such as being an incorporated public interest association or an incorporated public interest foundation), and excludes the case where the provisions of Article 33, paragraph (1), item (ii) apply);

where land within the district designated as a protection forest pursuant to the provisions of Article 25 or Article 25-2 of the Forest Act or land within a protection facility district designated pursuant to the provisions of Article 41 of that Act is purchased by the State or a local government for a protection facility project prescribed in paragraph (3) of that Article;

where farmland, etc. prescribed in Article 3, paragraph (2), item (vi) of the Act on Special Financial Support for Promoting Group Relocation for Disaster Mitigation (Act No. 132 of 1972) located within a relocation promotion area prescribed in Article 2, paragraph (1) of that Act that is specified in a group relocation promotion project plan prescribed in Article 3, paragraph (1) of that Act for which the consent referred to in that paragraph has been obtained, is purchased by a local government based on the group relocation promotion project plan (excluding the case where the provisions of Article 33, paragraph (1), item (ii) apply);

where agricultural land prescribed in Article 4, paragraph (1), item (i) of the Act on Promotion of Improvement of Agricultural Management Foundation that is located within the district prescribed in Article 22-4, paragraph (1) of that Act is purchased, based on the request referred to in paragraph (2) of that Article, by the farmland intermediary management organization referred to in that paragraph (limited to the case where the farmland intermediary management organization satisfies the requirements specified by Cabinet Order, such as being an incorporated public interest association or an incorporated public interest foundation).

Where, with regard to land, etc. held by an individual, two or more purchases referred to in those provisions have been made for use in a single project pertaining to the purchases referred to in the items of the preceding paragraph, if those purchases were made over two or more years, the provisions of paragraph (1) do not apply to the purchases other than those made in the year in which the purchases referred to in those provisions were first made.

With regard to a person who would be required to file a tax return for the year even if the provisions of paragraph (1) were applied, the provisions of that paragraph apply only if the tax return for the year for which the person seeks the application of the provisions of that paragraph contains a statement to the effect that the person seeks the application of the provisions of that paragraph, and a document certifying that the purchase of the land, etc. referred to in paragraph (1) has been made, which was issued by the person making the purchase referred to in the items of paragraph (2), and any other documents specified by Order of the Ministry of Finance are attached to that return.

Even in the case where no tax return has been filed, or a tax return without the statement or attachment referred to in the preceding paragraph has been filed, if the district director finds that there were unavoidable circumstances for the failure to file the return or to include the statement or attachment, the district director may apply the provisions of paragraph (1), but only if there has been a submission of a document containing that statement and the documents specified by Order of the Ministry of Finance referred to in that paragraph.

A person making a purchase referred to in the items of paragraph (2) must, pursuant to the provisions of Order of the Ministry of Finance, submit a record of payments pertaining to the purchase of the land, etc. referred to in paragraph (1) to the district director with jurisdiction over the location of the business office, office, or other place of business pertaining to the implementation of the project.