Act on Special Measures Concerning Taxation

If an individual has transferred land located in Japan or a right existing on land (hereinafter referred to in this paragraph and the following paragraph as "land, etc.") that the individual acquired between January 1, 2009 and December 31, 2010 (excluding an acquisition from the individual's spouse or any other person who has a special relationship with the individual specified by Cabinet Order, an acquisition through inheritance, bequest, gift, or exchange, and any other acquisition specified by Cabinet Order), for which the holding period prescribed in Article 31, paragraph (2) exceeds five years as of January 1 of that year, then, except where the individual is subject to the provisions of Articles 33 through 33-3, Article 36-2, Article 36-5, Article 37, Article 37-4, or Article 37-8 with regard to all or part of the land, etc. transferred during that year, with regard to the application of the provisions of Article 31 to the transfer of all of that land, etc., the phrase "the amount of long-term capital gains (" in paragraph (1) of that Article is deemed to be replaced with "the amount remaining after deducting 10 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 35-2, paragraph (1) is less than 10 million yen, the amount of the portion pertaining to the transfer of the land, etc.) from the amount of long-term capital gains (".

The transfer of land, etc. referred to in the preceding paragraph is to include the lending of real property, etc. giving rise to capital gains, and is not to include a transfer that is subject to the provisions of Article 58 of the Income Tax Act or the provisions of Article 33-4 or Article 34 through the preceding Article.

The provisions of paragraph (1) apply only if the tax return for the year for which the individual seeks the application of the provisions of that paragraph contains a statement to the effect that the individual is subject to the provisions of that paragraph, and the documents specified by Order of the Ministry of Finance as documents certifying that the case falls under the provisions of that paragraph 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.

If an individual has transferred, between July 1, 2020 and December 31, 2028, low-use or unused land prescribed in Article 13, paragraph (4) of the Basic Land Act (Act No. 84 of 1989) that is located within a city planning area prescribed in Article 4, paragraph (2) of the City Planning Act (hereinafter referred to in this paragraph and item (ii) of the following paragraph as "low-use or unused land") or a right existing on that low-use or unused land (hereinafter collectively referred to through paragraph (4) as "low-use or unused land, etc."), for which the holding period prescribed in Article 31, paragraph (2) exceeds five years as of January 1 of that year (limited to the case where the low-use or unused land, etc. is to be used after the transfer), then, except where the individual is subject to the provisions of Articles 33 through 33-3, Article 36-2, Article 36-5, Article 37, Article 37-4, or Article 37-8 with regard to all or part of the low-use or unused land, etc. transferred during that year, with regard to the application of the provisions of Article 31 to the transfer of all of that low-use or unused land, etc., the phrase "the amount of long-term capital gains (" in paragraph (1) of that Article is deemed to be replaced with "the amount remaining after deducting 1 million yen (or, where the portion of the amount of long-term capital gains pertaining to the transfer of low-use or unused land, etc. prescribed in Article 35-3, paragraph (1) that falls under the provisions of that paragraph is less than 1 million yen, the amount of the portion pertaining to the transfer of the low-use or unused land, etc.) from the amount of long-term capital gains (".

The transfer of low-use or unused land, etc. referred to in the preceding paragraph is to include the lending of real property, etc. giving rise to capital gains, and is not to include the following transfers:

a transfer to the individual's spouse or any other person who has a special relationship with the individual specified by Cabinet Order;

a transfer for which the amount of consideration (including the consideration for the transfer of assets located on the low-use or unused land made together with the transfer of the low-use or unused land, etc.) exceeds 5 million yen (or 8 million yen, where the low-use or unused land, etc. is located within any of the following districts):

the district specified by Cabinet Order within a city planning area prescribed in Article 4, paragraph (2) of the City Planning Act;

the district of a municipality that has prepared a plan for measures concerning land with an unknown owner prescribed in Article 45, paragraph (1) of the Act on Special Measures for Facilitating the Use of Land With an Unknown Owner (excluding the district listed in (a));

a transfer that is subject to the provisions of Article 58 of the Income Tax Act or the provisions of Article 33-4 or Article 34 through the preceding Article.

The provisions of paragraph (1) do not apply if the individual transferred, in the year preceding that year or in the year before that, land that was subdivided in that preceding year or the year before that from land that formed one parcel together with the low-use or unused land, etc. for which the individual seeks the application of the provisions of that paragraph, or a right existing on that land (including the lending of real property, etc. giving rise to capital gains), and has been subject to the provisions of that paragraph with regard to that transfer.

The provisions of paragraph (1) apply only if the tax return for the year for which the individual seeks the application of the provisions of that paragraph contains a statement to the effect that the individual is subject to the provisions of that paragraph, and documents concerning the use, after the transfer, of the low-use or unused land, etc. for which the individual seeks the application of the provisions of that paragraph 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.

If an individual has transferred an asset held by the individual (including the lending of real property, etc. giving rise to capital gains; hereinafter the same applies in this Article), and the total of the amounts to be deducted as a result of the application of two or more of the provisions of Article 33-4, paragraph (1), Article 34, paragraph (1), Article 34-2, paragraph (1), Article 34-3, paragraph (1), Article 35, paragraph (1), Article 35-2, paragraph (1), and paragraph (1) of the preceding Article to the transfer of assets during that year comes to exceed 50 million yen, the amount to be deducted pursuant to those provisions is to be the amount calculated pursuant to the provisions of Cabinet Order within the limit of 50 million yen in total.