Act on Special Measures Concerning Taxation

Where an individual, during the period from October 1, 1987 to December 31, 2028, transfers land, etc. that the individual owns and whose holding period prescribed in paragraph (2) of the preceding Article exceeds five years as of January 1 of the year of the transfer, if the transfer falls under a transfer for a superior residential area, etc., with regard to the capital gains from the transfer (excluding a transfer that is subject to the provisions of the following Article; hereinafter the same applies in this paragraph), notwithstanding the provisions of the first sentence of paragraph (1) of the preceding Article, the amount of income tax imposed on the taxable long-term capital gains pertaining to the transfer pursuant to the provisions of the first sentence of that paragraph is the amount equivalent to the amount specified in the following items according to the categories of cases listed in those items:

where the taxable long-term capital gains are 20 million yen or less: the amount equivalent to 10 percent of the taxable long-term capital gains;

where the taxable long-term capital gains exceed 20 million yen: the total of the following amounts:

2 million yen;

the amount equivalent to 15 percent of the amount remaining after deducting 20 million yen from the taxable long-term capital gains.

The transfer for a superior residential area, etc. prescribed in the preceding paragraph means a transfer that has been certified, pursuant to the provisions of Order of the Ministry of Finance, as falling under any of the following transfers of land, etc.:

transfer of land, etc. to the State, a local government, or any other corporation equivalent thereto which is specified by Cabinet Order;

transfer of land, etc. to an Urban Renaissance Agency, a Land Development Public Corporation, or any other corporation equivalent thereto which is specified by Cabinet Order as a corporation aiming to conduct business for the provision of residential land or housing or advance acquisition of land, for which the transferred land, etc. is deemed to be directly necessary for conducting the business (excluding a transfer of land, etc. to a Land Development Public Corporation which is specified by Cabinet Order);

transfer of the following land, etc. to a Land Development Public Corporation, with the transferred land, etc. being used for the respective projects specified below that are implemented by the Urban Renaissance Agency:

land, etc. located within a promotion area for reconstruction of a disaster-damaged urban district specified in a city plan pursuant to the provisions of Article 5, paragraph (1) of the Act on Special Measures concerning Reconstruction of Urban Districts Damaged by Disaster (Act No. 14 of 1995) (hereinafter referred to as a "promotion area for reconstruction of a disaster-damaged urban district" up to Article 34-2): a land readjustment project for reconstruction of a disaster-damaged urban district under that Act (hereinafter referred to as a "land readjustment project for reconstruction of a disaster-damaged urban district" up to Article 34-2);

land, etc. located within the area of a housing-damaged municipality prescribed in Article 21 of the Act on Special Measures concerning Reconstruction of Urban Districts Damaged by Disaster: a type 2 urban redevelopment project under the Urban Renewal Act (Act No. 38 of 1969).

transfer of land, etc. by expropriation or exchange, etc. prescribed in Article 33-4, paragraph (1) (excluding that which falls under the category of a transfer listed in the preceding three items or a transfer of land, etc. specified by Cabinet Order);

transfer of land, etc. to the project implementer of a type 1 urban redevelopment project under the Urban Renewal Act, with the transferred land, etc. being used for the project (excluding that which falls under the category of a transfer listed in the preceding items or any other transfer of land, etc. specified by Cabinet Order);

transfer of land, etc. to the project implementer of a disaster prevention block improvement project under the Act on Promotion of Improvement of Disaster Control Districts in Populated Urban Districts (Act No. 49 of 1997), with the transferred land, etc. being used for the project (excluding that which falls under the category of a transfer listed in items (i) through (iv) or any other transfer of land, etc. specified by Cabinet Order);

transfer of land, etc. to a certified business operator as prescribed in Article 23 of the Act on Special Measures concerning Urban Reconstruction for an urban reconstruction project as prescribed in Article 25 of the Act under a certified plan as prescribed in the Article (limited to an urban reconstruction project that meets the requirements that the buildings specified in the certified plan (limited to buildings whose building area is the area specified by Order of the Ministry of Finance or more) are constructed and that the area of the district where the project is to be carried out is one hectare or more, as well as any other requirements specified by Cabinet Order) (such certified business operator includes the Urban Renaissance Agency that has concluded the agreement concerning the acquisition of land, etc. within the district with the certified business operator, as specified in the certified plan), with the transferred land, etc. being used for the urban reconstruction project (excluding that which falls under the category of a transfer listed in item (ii) through the preceding item);

transfer of land, etc. to a person who carries out a specified project prescribed in Article 2, paragraph (2) of the National Strategic Special Zones Act that is set forth in a certified zone plan prescribed in Article 11, paragraph (1) of that Act, or a project to develop facilities that become necessary in connection with the implementation of that specified project (limited to those projects specified by Order of the Ministry of Finance as particularly contributing to the strengthening of the international competitiveness of industry or to the formation of bases for international economic activities), with the transferred land, etc. being used for those projects (excluding that which falls under the category of a transfer listed in item (ii) through the preceding item);

transfer of the following land, etc. (limited to a transfer made after the ruling) to the business operator referred to in Article 10, paragraph (2), item (i) of the Act on Special Measures for Facilitating the Use of Land With an Unknown Owner (Act No. 49 of 2018) who is stated in the written application for a ruling under paragraph (2) of that Article (hereinafter referred to in this item as the "written application for a ruling") pertaining to a ruling made pursuant to the provisions of Article 13, paragraph (1) of that Act (limited to a ruling pertaining to the right listed in Article 10, paragraph (1), item (i) of that Act, and excluding a ruling that has lost its effect pursuant to the provisions of Article 18 of that Act; hereinafter referred to in this item as a "ruling"), and who carries out the project referred to in item (ii) of that paragraph that is stated in that written application for a ruling, with the transferred land, etc. being used for that project (excluding that which falls under the category of a transfer listed in items (i) through (iii) or item (v) through the preceding item):

specified land with an unknown owner stated in that written application for a ruling (meaning specified land with an unknown owner prescribed in Article 10, paragraph (2), item (v) of the Act on Special Measures for Facilitating the Use of Land With an Unknown Owner; the same applies hereinafter in this item) or a right existing on that specified land with an unknown owner;

land other than specified land with an unknown owner, or a right existing on that land, that is stated, as land to be acquired by that business operator, in the plan listed in (c) of the business plan listed in Article 10, paragraph (3), item (i) of the Act on Special Measures for Facilitating the Use of Land With an Unknown Owner that is attached to that written application for a ruling (excluding what is so stated in the case where the project stated in that written application for a ruling falls under a project specified by Cabinet Order as a project that is not found to have a high need to use the land other than specified land with an unknown owner together with the specified land with an unknown owner listed in (a)).

transfer of land, etc. to an approved developer of land for regional economy advancement projects prescribed in Article 12-4 of the Act on Strengthening a Framework for Regional Growth and Development by Promoting Regional Economy Advancement Projects that carries out the approved development of land for regional economy advancement projects prescribed in that Article, with the transferred land, etc. being used for that approved development of land for regional economy advancement projects (excluding that which falls under the category of a transfer listed in item (v), (vi) or (viii) or the preceding item);

transfer of land, etc. (excluding that pertaining to a right to an adjacent project site prescribed in Article 55, paragraph (1), item (ii) of the Act on Facilitation of the Regeneration, etc. of Condominiums (Act No. 78 of 2002) (hereinafter referred to in this item as a "right to an adjacent project site") and that pertaining to a right to the underlying land of a project prescribed in item (iii) of that paragraph) to the project implementer (meaning the project implementer prescribed in Article 2, paragraph (1), item (x) of that Act; hereinafter the same applies in this item) of a condominium regeneration project (meaning a condominium regeneration project prescribed in Article 2, paragraph (1), item (x) of that Act, limited to one specified by Cabinet Order as contributing to securing a good living environment; hereinafter the same applies in this item) based on a demand under Article 15, paragraph (1) or Article 64, paragraph (1) or paragraph (3) of that Act or an offer under Article 56, paragraph (1) of that Act, or transfer of land, etc. (limited to that pertaining to a right to an adjacent project site) to the project implementer of a condominium regeneration project in which the pre-reconstruction condominium prescribed in Article 2, paragraph (1), item (xi) of that Act or the lost condominium (meaning a condominium prescribed in item (i) of that paragraph; hereinafter the same applies in this item and the following item) that stood on the reconstruction site prescribed in item (xiii) of that paragraph falls under a building specified by Cabinet Order, and the total floor area of the post-regeneration condominium prescribed in item (xiv) of that paragraph is the total floor area of that pre-reconstruction condominium or that lost condominium or more, with the land, etc. pertaining to these transfers being used for those condominium regeneration projects (excluding that which falls under the category of a transfer listed in items (vii) through (ix));

transfer of land, etc. to a person who implements a condominium, etc. sale project prescribed in Article 4, paragraph (2), item (vi) of the Act on Facilitation of the Regeneration, etc. of Condominiums based on a demand under Article 121, paragraph (1) of that Act (limited to a project for which the certified removal, etc. plan prescribed in Article 107 of that Act or any other plan specified by Order of the Ministry of Finance pertaining to that condominium, etc. sale project contains matters concerning a condominium (limited to one specified by Cabinet Order as having a good living environment) to be newly built on the land after the removal of the condominium or on the site for sale prescribed in Article 2, paragraph (1), item (xxiii) of that Act, matters concerning roads, parks, open spaces and other facilities for public use to be developed on that land, and other matters specified by Order of the Ministry of Finance; hereinafter the same applies in this item), or transfer of land, etc. to a person who implements that condominium, etc. sale project based on the distribution money acquisition plan prescribed in Article 141, paragraph (1) of that Act that has obtained the approval under that paragraph in connection with that condominium, etc. sale project (where approval for a change to that distribution money acquisition plan has been obtained pursuant to the provisions of that paragraph as applied mutatis mutandis pursuant to Article 145 of that Act, the plan after the change), with the land, etc. pertaining to these transfers being used for those condominium, etc. sale projects;

transfer of land, etc., which is located in a district as specified by Cabinet Order within a city planning district as prescribed in Article 4, paragraph (2) of the City Planning Act, to a person who carries out a project to construct a building whose building area is the area specified by Cabinet Order or more (limited to a project that meets the requirement that the area of the district where the project is to be carried out is 500 square meters or more, as well as any other requirements specified by Cabinet Order), with the transferred land, etc. being used for the project (excluding that which falls under the category of a transfer listed in items (vii) through (ix), item (x), or items (xiii) through (xvi));

that the area of the unit of residential land is 1000 square meters or more (for the area of a unit of residential land within a district where the area that requires a development permit is less than 1000 square meters, the area specified by Cabinet Order or more); and

that the development of the unit of residential land is deemed to be carried out in conformity with the details of the development permit.

that the area of the unit of residential land is 1000 square meters or more (for the area of a unit of residential land within a district specified by Cabinet Order, the area specified by Cabinet Order or more);

that the development is carried out within a city planning district as prescribed in Article 4, paragraph (2) of the City Planning Act; and

that the development of the unit of residential land is carried out by obtaining authorization from the prefectural governor, as specified by Cabinet Order, as a project contributing to supplying good residential land to be used for constructing houses, and is deemed to be carried out in conformity with the details of the authorization.

that a group of houses satisfies the requirement that the number of houses to be constructed is 25 or more;

that mid-to-high-rise fire-proof apartment houses satisfy the requirement that independent units to be used as residences (meaning the units equivalent to the parts of a building as prescribed in Article 2, paragraph (1) of the Act on Building Unit Ownership (Act No. 69 of 1962)) are 15 or more or that the floor area of the mid-to-high-rise fire-proof apartment houses is 1000 square meters or more, as well as any other requirements as specified by Cabinet Order;

that these are constructed within a city planning district prescribed in (b) of the preceding item; and

that the construction of the group of houses or mid-to-high-rise fire-proof apartment houses is carried out by obtaining authorization from the prefectural governor, as specified by Cabinet Order, as a project contributing to supplying good houses (for mid-to-high-rise fire-proof apartment houses with a land area of less than 1000 square meters, by obtaining such authorization from the mayor of the municipality).

transfer of land, etc. (limited to land, etc. within a district for a land readjustment project as prescribed in Article 2, paragraph (4) of the Land Readjustment Act (Act No. 119 of 1954) carried out under the Act, for which provisional substitute land has been designated under Article 98, paragraph (1) of the Act (including the case where the land or the part thereof subject to the right to provisionally use or to receive proceeds therefrom has been designed; hereinafter the same applies in this item)) to an individual or a corporation that constructs a house or a mid-to-high-rise fire-proof apartment house (limited to that which meets the following requirements), which is made not later than December 31 of the year that includes the day on which three years have elapsed from the day on which the designation has become effective (in the case where the day on which the individual or the corporation may start using or receiving proceeds from the right is determined pursuant to the provisions of Article 99, paragraph (2) of the Act, from that day), with the land, etc. designated as provisional substitute land for the transferred land, etc. being used for constructing the house or mid-to-high-rise fire-proof apartment house (excluding that which falls under the category of a transfer listed in items (vii) through (ix), item (x), or the preceding three items):

that the house satisfies the requirements specified by Cabinet Order concerning the floor area of the house to be constructed and the land area for constructing the house;

that a mid-to-high-rise fire-proof apartment house satisfies the requirements specified by Cabinet Order as prescribed in (b) of the preceding item; and

that a house or mid-to-high-rise fire-proof apartment house is deemed to be in conformity with the Building Standards Act (Act No. 201 of 1950) and other laws and regulations concerning the construction of housing.

In the case referred to in paragraph (1) (including where it is applied mutatis mutandis pursuant to the preceding paragraph), where an individual receives the application of the provisions of Articles 33 through 33-4, Articles 34 through 35-3, Article 36-2, Article 36-5, Article 37, Articles 37-4 through 37-6, or Article 37-8 with regard to land, etc. that the individual owns, the transfer of that land, etc. is deemed not to fall under the transfer for a superior residential area, etc. or the transfer for a determined site for constructing a superior residential area, etc. prescribed in paragraph (1) or the preceding paragraph.