Act on Special Measures Concerning Taxation

Where an individual, in Japan, carries out the new construction, etc. of a residential house (meaning the new construction of a residential house (meaning a house used as a dwelling that is specified by Cabinet Order; hereinafter the same applies up to paragraph (31)) or the acquisition of a residential house that has not been used since its construction (excluding an acquisition specified by Cabinet Order from the individual's spouse or any other person who has a special relationship with the individual, and an acquisition by gift; hereinafter the same applies in this Article, except in paragraph (19)); hereinafter the same applies in this paragraph, paragraph (3), paragraph (3), item (iii) of the following Article and Article 41-2-2), the acquisition of a renovated resale house (meaning the acquisition, from a real estate broker prescribed in Article 2, item (iii) of the Real Estate Brokerage Act (hereinafter referred to in this Article as a "real estate broker") that has carried out the specified extension or remodeling, etc., of a house specified by Cabinet Order on which specified extension or remodeling, etc. has been carried out, out of houses that have been used since their construction and that are specified by Cabinet Order as conforming to the earthquake resistance standards (meaning the provisions or standards specified by Cabinet Order as those concerning safety against earthquakes; the same applies in paragraph (17) and paragraph (35)) (hereinafter referred to up to paragraph (31) and in paragraph (35) as an "existing house"); hereinafter the same applies in this paragraph, paragraph (3), paragraph (3), item (iii) of the following Article and Article 41-2-2), the acquisition of an existing house (excluding the acquisition of a renovated resale house), or the extension or remodeling, etc. of a house used as the individual's residence that is specified by Cabinet Order (hereinafter referred to up to that Article as "housing acquisition, etc."), and begins to use the house (for a house on which extension or remodeling, etc. has been carried out, the part pertaining to the extension or remodeling, etc.; hereinafter the same applies in this paragraph) as the individual's residence during the period from January 1, 2017 to December 31, 2030 (limited to where the individual begins to use the house as their residence within six months from the date of its new construction, the date of its acquisition or the date of its extension or remodeling, etc.), if the individual has the amount of any of the following loans or debts pertaining to the housing acquisition, etc. (excluding those corresponding to interest; hereinafter referred to in this Article and the following Article as "housing loans, etc."), the amount of the special tax credit for housing loans, etc. is deducted from the amount of income tax for the relevant year for each year, out of the applicable years (meaning each year in which the individual continuously uses the house as their residence from that day until December 31 of that year (for the year that includes the date of the individual's death, until that date; the same applies in the following paragraph, paragraph (6), paragraph (11), paragraph (14) and paragraph (1) of the following Article)) within the 10 years from the year that includes the day on which the individual began to use the house as their residence (hereinafter referred to in this paragraph, paragraph (3), paragraph (4) and the following Article as the "year of moving in") onward (or within 13 years, if the year of moving in is 2022 or 2023 and the housing acquisition, etc. pertaining to that residence falls under the new construction, etc. of a residential house or the acquisition of a renovated resale house), in which the individual's total income for the relevant year as referred to in Article 2, paragraph (1), item (xxx) of the Income Tax Act pertaining to the individual's income tax for that year (hereinafter referred to in this Article as "total income") is 20 million yen or less.

a loan borrowed from a financial institution prescribed in Article 8, paragraph (1), the Japan Housing Finance Agency, a local government or any other person specified by Cabinet Order that lends funds for the housing acquisition, etc., in order to appropriate it for the funds required for the housing acquisition, etc. (including a loan specified by Cabinet Order as one borrowed from those persons in order to appropriate it for the funds required for the acquisition of land used as the site of the house pertaining to the housing acquisition, etc. that is carried out together with the housing acquisition, etc., or of rights existing on that land (hereinafter referred to in this paragraph as "land, etc.")), and a debt specified by Cabinet Order as being similar to that loan, which is to be repaid under the contract by the method of installment repayment over a repayment period of 10 years or more;

a debt pertaining to the contract price for the work of the housing acquisition, etc. owed to a construction business operator prescribed in Article 2, paragraph (3) of the Construction Business Act (Act No. 100 of 1949), or a debt pertaining to the consideration for the housing acquisition, etc. (including the acquisition of land, etc. used as the site of the house pertaining to the housing acquisition, etc. that is carried out together with the housing acquisition, etc., which is specified by Cabinet Order) owed to a real estate broker, the Urban Renaissance Agency, a Local Housing Corporation or any other person specified by Cabinet Order that sells residential houses in lots (including a debt specified by Cabinet Order as being similar to that debt), which is to be paid under the contract by the method of installment payment over an installment payment period of 10 years or more;

a debt owed to the Urban Renaissance Agency, a Local Housing Corporation or any other corporation specified by Cabinet Order, based on a contract to which that corporation is a party concerning the succession to a debt pertaining to the acquisition of the existing house (including the acquisition of land, etc. that was used as the site of the existing house that is carried out together with the acquisition of the existing house, which is specified by Cabinet Order), which, after the succession, is to be paid by the method of installment payment over an installment payment period of 10 years or more;

a loan borrowed from the employer of an individual who receives payment of salary, etc. prescribed in Article 28, paragraph (1) of the Income Tax Act or severance pay or other such compensation prescribed in Article 30, paragraph (1) of that Act (meaning the person who makes that payment, where the individual does not fall under the category of an officer prescribed in Article 2, item (xv) of the Corporation Tax Act or any other person specified by Cabinet Order; hereinafter the same applies in this item), in order to appropriate it for the funds required for the housing acquisition, etc. (including a loan specified by Cabinet Order as one borrowed from the employer of the individual in order to appropriate it for the funds required for the acquisition of land, etc. used as the site of the house pertaining to the housing acquisition, etc. that is carried out together with the housing acquisition, etc.), or a debt pertaining to the consideration for the housing acquisition, etc. (including the acquisition of land, etc. used as the site of the house pertaining to the housing acquisition, etc. that is carried out together with the housing acquisition, etc., which is specified by Cabinet Order) owed to the employer of the individual (including a debt specified by Cabinet Order as being similar to those loans or debts), which is to be repaid or paid under the contract by the method of installment repayment or installment payment over a repayment period or installment payment period of 10 years or more.

The amount of the special tax credit for housing loans, etc. prescribed in the preceding paragraph is the amount calculated by multiplying the total amount of housing loans, etc. as of December 31 of the relevant year (if that total amount exceeds the maximum loan amount, the maximum loan amount) by the credit rate (if that amount includes a fraction of less than 100 yen, the fraction is to be discarded).

The maximum loan amount prescribed in the preceding paragraph is the amount specified in each of the following items according to the category of cases listed in those items:

if the year of moving in is any year from 2017 to 2021 (limited to where the housing acquisition, etc. pertaining to that residence falls under a specified acquisition): 40 million yen;

if the year of moving in is 2022 or 2023 (limited to where the housing acquisition, etc. pertaining to that residence falls under the new construction, etc. of a residential house or the acquisition of a renovated resale house): 30 million yen;

if the year of moving in is any year from 2017 to 2030 (limited, where the year of moving in is any year from 2017 to 2021, to where the housing acquisition, etc. pertaining to that residence falls under something other than a specified acquisition, and, where the year of moving in is 2022 or 2023, to where the housing acquisition, etc. pertaining to that residence falls under something other than the new construction, etc. of a residential house or the acquisition of a renovated resale house): 20 million yen.

The credit rate prescribed in paragraph (2) is the rate specified in each of the following items according to the category of cases listed in those items:

if the year of moving in is any year from 2017 to 2021: 1 percent;

if the year of moving in is any year from 2022 to 2030: 0.7 percent.

The specified acquisition prescribed in paragraph (3) means the housing acquisition, etc. by an individual in the case where the amount equivalent to the sum of the amount of consumption tax and the amount of local consumption tax included in the amount of consideration or the amount of expenses for the housing acquisition, etc. is the amount equivalent to the sum of the amount of consumption tax to be imposed, with respect to the taxable transfer, etc. of assets prescribed in Article 2, paragraph (1), item (ix) of the Consumption Tax Act (referred to in paragraph (12) as "taxable transfer, etc. of assets") pertaining to the housing acquisition, etc., at the tax rate prescribed in Article 29 of the Consumption Tax Act as amended by Article 2 or Article 3 of the Act Partially Amending the Consumption Tax Act, etc., and Other Matters to Carry Out a Drastic Reform of the Tax System for Securing Stable Financial Resources for Social Security, etc. (Act No. 68 of 2012), and the amount of local consumption tax to be imposed using that amount of consumption tax as the tax base.

Where an individual, in Japan, carries out the new construction, etc. of a certified house, etc. (meaning the new construction of a certified house, etc. (meaning any of the following houses; hereinafter the same applies in this paragraph, paragraph (9), paragraphs (21) through (23), paragraph (26), paragraph (28) and paragraph (34)) or the acquisition of a certified house, etc. that has not been used since its construction; hereinafter the same applies in this paragraph, the following paragraph, paragraph (9), paragraph (14), paragraph (15) and Article 41-2-2), the acquisition of a renovated resale certified house, etc. (meaning the acquisition, from a real estate broker that has carried out the specified extension or remodeling, etc., of a house specified by Cabinet Order on which specified extension or remodeling, etc. has been carried out, out of existing houses that are certified houses, etc.; hereinafter the same applies in this paragraph, the following paragraph, paragraph (9) and Article 41-2-2), or the acquisition of an existing certified house, etc. (meaning the acquisition of an existing house that is a certified house, etc., other than one that falls under the acquisition of a renovated resale certified house, etc.; the same applies in the following paragraph and paragraph (9), item (ii), (b), 2.) (hereinafter referred to in this paragraph, paragraph (9) and paragraph (31) as "building or acquiring a certified house, etc."), and begins to use the certified house, etc. as the individual's residence, in the manner prescribed in paragraph (1), during the period from January 1, 2017 (for a house listed in item (iii) or item (iv), January 1, 2022) to December 31, 2030, if, in each year within the 10 years from the year that includes the day on which the individual began to use it as their residence (referred to in the following paragraph through paragraph (10) as the "year of moving in") onward (or within 13 years, if the year that includes that day is any year from 2022 to 2025 and the housing acquisition, etc. pertaining to that residence falls under the new construction, etc. of a certified house, etc. or the acquisition of a renovated resale certified house, etc., or if the year that includes that day is any year from 2026 to 2030) (limited to a year in which the individual continuously uses it as their residence from that day until December 31 of that year; hereinafter referred to in this paragraph and paragraph (1) of the following Article as a "special application year for a certified house, etc."), the individual has the amount of housing loans, etc. pertaining to the building or acquiring a certified house, etc. (hereinafter referred to in this paragraph as "housing loans, etc. for a certified house, etc."), the individual may choose to apply the provisions of this Article, the following Article and Article 41-2-2 with the amount of the special tax credit for housing loans, etc. prescribed in paragraph (1) for that special application year for a certified house, etc. being, notwithstanding the provisions of paragraph (2), the amount calculated by multiplying the total amount of housing loans, etc. for a certified house, etc. as of December 31 of the relevant year (if that total amount exceeds the maximum loan amount for a certified house, etc., that maximum loan amount for a certified house, etc.) by the credit rate for a certified house, etc. (if that amount includes a fraction of less than 100 yen, the fraction is to be discarded). In this case, in paragraph (21), the phrase "paragraph (1)" is deemed to be replaced with "paragraph (6)"; in paragraph (22), the phrase "of paragraph (1)" is deemed to be replaced with "of paragraph (6)", and the phrase "that paragraph" with "paragraph (1)"; in paragraph (23), the phrase "of paragraph (1)" is deemed to be replaced with "of paragraph (6)"; in paragraph (25), the phrase "of that paragraph" is deemed to be replaced with "of paragraph (6)", and the phrase "the provisions of that paragraph do not apply" with "the provisions of paragraph (1) do not apply"; in paragraph (26), the phrase "of that paragraph" is deemed to be replaced with "of paragraph (6)", and the phrase "that paragraph" with "paragraph (1)"; in paragraph (28), the phrase "(that paragraph" is deemed to be replaced with "(paragraph (6)", and the phrase "), that paragraph" with "), paragraph (1)"; and in paragraph (31) and paragraph (34), the phrase "(that paragraph" is deemed to be replaced with "(paragraph (6)", and the phrase ", that paragraph" with ", paragraph (1)".

a house used as a dwelling that falls under the category of a certified long-life quality house prescribed in Article 11, paragraph (1) of the Act on the Promotion of Long-Life Quality Housing (Act No. 87 of 2008) and is specified by Cabinet Order;

a house used as a dwelling that falls under the category of a low-carbon building prescribed in Article 2, paragraph (3) of the Act on Promotion of Low-Carbon Cities and is specified by Cabinet Order, or a house that falls under the category of a specified building prescribed in Article 9, paragraph (1) of that Act which is deemed to be a low-carbon building pursuant to the provisions of Article 16 of that Act, and is specified by Cabinet Order;

a specified energy consumption performance-improved house (meaning a house other than the houses listed in the preceding two items that is specified by Cabinet Order as a house used as a dwelling that significantly contributes to the rational use of energy; the same applies in the following paragraph and paragraph (9), item (ii));

an energy-efficient house (meaning a house other than the houses listed in the preceding three items that is specified by Cabinet Order as a house used as a dwelling that contributes to the rational use of energy; the same applies in the following paragraph, paragraph (9), item (iii) and item (iv) and paragraph (25)).

The maximum loan amount for a certified house, etc. prescribed in the preceding paragraph is the amount specified in each of the following items according to the category of cases listed in those items:

if the year of moving in is any year from 2017 to 2023 (limited to the case specified in each of the following according to the category of the year of moving in listed therein): 50 million yen;

any year from 2017 to 2021: where the housing acquisition, etc. pertaining to that residence falls under a specified acquisition (meaning a specified acquisition prescribed in paragraph (5); the same applies in item (v), (a));

2022 or 2023: where the house pertaining to that residence is a certified house (meaning a house listed in item (i) or item (ii) of the preceding paragraph; hereinafter the same applies in this paragraph and paragraph (9), item (i) and item (ii), (b), 2.) and the housing acquisition, etc. pertaining to that residence falls under the new construction, etc. of a certified house, etc. or the acquisition of a renovated resale certified house, etc.

if the year of moving in is any year from 2022 to 2030 (limited to the case specified in each of the following according to the category of the year of moving in listed therein): 45 million yen;

2022 or 2023: where the house pertaining to that residence is a specified energy consumption performance-improved house and the housing acquisition, etc. pertaining to that residence falls under the new construction, etc. of a certified house, etc. or the acquisition of a renovated resale certified house, etc.;

any year from 2024 to 2030: where the house pertaining to that residence is a certified house and the housing acquisition, etc. pertaining to that residence falls under the new construction, etc. of a certified house, etc. or the acquisition of a renovated resale certified house, etc.

if the year of moving in is 2022 or 2023 (limited to where the house pertaining to that residence is an energy-efficient house and the housing acquisition, etc. pertaining to that residence falls under the new construction, etc. of a certified house, etc. or the acquisition of a renovated resale certified house, etc.): 40 million yen;

if the year of moving in is any year from 2024 to 2030 (limited to the case specified in each of the following according to the category of the year of moving in listed therein): 35 million yen;

2024 or 2025: where the house pertaining to that residence is a specified energy consumption performance-improved house and the housing acquisition, etc. pertaining to that residence falls under the new construction, etc. of a certified house, etc. or the acquisition of a renovated resale certified house, etc.;

any year from 2026 to 2030: the following cases:

where the house pertaining to that residence is a specified energy consumption performance-improved house and the housing acquisition, etc. pertaining to that residence falls under the new construction, etc. of a certified house, etc. or the acquisition of a renovated resale certified house, etc.;

where the house pertaining to that residence is a certified house or a specified energy consumption performance-improved house and the housing acquisition, etc. pertaining to that residence falls under the acquisition of an existing certified house, etc.

if the year of moving in is any year from 2017 to 2025 (limited to the case specified in each of the following according to the category of the year of moving in listed therein): 30 million yen;

any year from 2017 to 2021: where the housing acquisition, etc. pertaining to that residence falls under something other than a specified acquisition;

2022 or 2023: where the housing acquisition, etc. pertaining to that residence falls under the acquisition of an existing certified house, etc.;

2024 or 2025: the following cases:

where the house pertaining to that residence is an energy-efficient house;

where the house pertaining to that residence is a certified house or a specified energy consumption performance-improved house and the housing acquisition, etc. pertaining to that residence falls under the acquisition of an existing certified house, etc.

if the year of moving in is any year from 2026 to 2030 (limited to where the house pertaining to that residence is an energy-efficient house): 20 million yen.

The credit rate for a certified house, etc. prescribed in paragraph (6) is 1 percent if the year of moving in is any year from 2017 to 2021, and 0.7 percent if the year of moving in is any year from 2022 to 2030.

With regard to an individual who is under 40 years of age and has a spouse, an individual who is 40 years of age or more and has a spouse under 40 years of age, or an individual who has a dependent relative under 19 years of age prescribed in Article 2, paragraph (1), item (xxxiv) of the Income Tax Act (hereinafter referred to in this paragraph as a "special eligible individual"), the maximum loan amount for a certified house, etc. prescribed in paragraph (7) in the case where the special eligible individual applies the provisions of paragraph (6) (limited to where the individual has carried out the new construction, etc. of a certified house, etc. or the acquisition of a renovated resale certified house, etc. and begins to use the certified house, etc. for which the new construction, etc. of a certified house, etc. has been carried out (including a special certified house, etc. prescribed in paragraph (18) that is deemed to be a certified house, etc. pursuant to the provisions of that paragraph) or the house for which the acquisition of a renovated resale certified house, etc. has been carried out as the residence of the special eligible individual, in the manner prescribed in paragraph (1), during the period from January 1, 2024 to December 31, 2025, or where the individual has carried out building or acquiring a certified house, etc. and begins to use the certified house, etc. (excluding a special certified house, etc. prescribed in paragraph (18) that is deemed to be a certified house, etc. pursuant to the provisions of that paragraph) as the residence of the special eligible individual, in the manner prescribed in paragraph (1), during the period from January 1, 2026 to December 31, 2030) may, notwithstanding the provisions of that paragraph, be the amount specified in each of the following items according to the category of cases listed in those items:

where the year of moving in is any year from 2024 to 2030 (limited to where the house relating to the residence is a certified house and the housing acquisition, etc. relating to the residence falls under new construction, etc. of a certified house, etc. or acquisition of a renovated resale certified house, etc.): 50,000,000 yen;

where the year of moving in is any year from 2024 to 2030 (limited to the cases specified in the following for the categories of the year of moving in listed therein): 45,000,000 yen;

2024 or 2025: where the house relating to the residence is a specified energy consumption performance-improved house and the housing acquisition, etc. relating to the residence falls under new construction, etc. of a certified house, etc. or acquisition of a renovated resale certified house, etc.;

each year from 2026 to 2030: the following cases:

where the house relating to the residence is a specified energy consumption performance-improved house and the housing acquisition, etc. relating to the residence falls under new construction, etc. of a certified house, etc. or acquisition of a renovated resale certified house, etc.;

where the house relating to the residence is a certified house or a specified energy consumption performance-improved house and the housing acquisition, etc. relating to the residence falls under acquisition of an existing certified house, etc.;

where the year of moving in is 2024 or 2025 (limited to where the house relating to the residence is an energy-efficient house and the housing acquisition, etc. relating to the residence falls under new construction, etc. of a certified house, etc. or acquisition of a renovated resale certified house, etc.): 40,000,000 yen;

where the year of moving in is any year from 2026 to 2030 (limited to where the house relating to the residence is an energy-efficient house): 30,000,000 yen.

Whether the individual or the spouse referred to in the preceding paragraph is less than 40 years of age or whether the dependent referred to in that paragraph is less than 19 years of age, or whether a person falls under the spouse of the individual or a dependent referred to in that paragraph, is to be determined based on the circumstances as of December 31 of the year of moving in (or, where any of those persons dies during the year, as of the time of the death).

If an individual has made a housing acquisition, etc. that falls under a special specified acquisition, and has used the residential house or existing house for which the housing acquisition, etc. was made, or the house on which the extension, rebuilding, etc. referred to in paragraph (1) was carried out (limited to the part relating to the extension, rebuilding, etc.), as his or her own residence as provided in that paragraph during the period from October 1, 2019 to December 31, 2020, and has an amount of housing loans, etc. relating to the housing acquisition, etc. (hereinafter referred to as "special specified housing loans, etc." in this paragraph) in each year from the year that is the tenth year counting from the year that includes the date on which it was used as the residence (hereinafter referred to as the "year of moving in" in this paragraph and paragraph (14)) to the year that is the twelfth year counting from the year of moving in (limited to a year in which the individual has continuously used it as his or her residence from that date to December 31 of that year; hereinafter referred to as a "special specified applicable year" in this paragraph and paragraph (1) of the following Article), the individual may apply the provisions of this Article, the following Article and Article 41-2-2, with the special specified applicable year as the applicable year prescribed in paragraph (1), and with the amount calculated by multiplying the total amount of special specified housing loans, etc. as of December 31 of that year (or 40,000,000 yen, if the total amount exceeds 40,000,000 yen) by 1 percent (or the maximum credit, if that amount exceeds the maximum credit, with any fraction of less than 100 yen in that amount rounded down) as the amount of the special tax credit for housing loans, etc. prescribed in that paragraph for the special specified applicable year. In this case, the phrase "10 years (or 13 years, if the year of moving in is 2022 or 2023 and the housing acquisition, etc. relating to the residence falls under new construction, etc. of a residential house or acquisition of a renovated resale house)" in that paragraph and the phrase "10 years prescribed in paragraph (1)" in paragraph (21) are deemed to be replaced with "13 years"; the phrase "10 years prescribed in paragraph (1)" in paragraph (22) is deemed to be replaced with "13 years", and the phrase "that paragraph" in that paragraph with "paragraph (1)"; and the phrase "10 years prescribed in paragraph (1)" in paragraph (23) and the phrase "10 years (meaning the 10 years prescribed in that paragraph)" in paragraphs (28), (31) and (34) are deemed to be replaced with "13 years".

The term "special specified acquisition" prescribed in the preceding paragraph means a housing acquisition, etc. of an individual in the case where the amount equivalent to the total of the amount of consumption tax and the amount of local consumption tax included in the amount of consideration or the amount of expenses for the housing acquisition, etc. is the amount equivalent to the total of the amount of consumption tax to be imposed on the taxable transfer, etc. of assets relating to the housing acquisition, etc. at the tax rate prescribed in Article 29 of the Consumption Tax Act as amended by the provisions of Article 3 of the Act Partially Amending the Consumption Tax Act, etc., and Other Matters to Carry Out a Drastic Reform of the Tax System for Securing Stable Financial Resources for Social Security, etc. (Act No. 68 of 2012) and the amount of local consumption tax to be imposed with that amount of consumption tax as the tax base.

The maximum credit referred to in paragraph (11) is the amount calculated by multiplying the amount specified by Cabinet Order as the remaining amount after deducting, from the amount of consideration or the amount of expenses relating to the housing acquisition, etc. that falls under a special specified acquisition (meaning a special specified acquisition prescribed in the preceding paragraph; the same applies in the following paragraph and paragraph (15)), the amount equivalent to the total of the amount of consumption tax and the amount of local consumption tax included in the amount of consideration or the amount of expenses for the housing acquisition, etc. (or 40,000,000 yen, if that amount exceeds 40,000,000 yen) by 2 percent and dividing the result by three.

If an individual has made new construction, etc. of a certified house, etc. that falls under a special specified acquisition, and has used the house for which the new construction, etc. of the certified house, etc. was made as his or her own residence as provided in paragraph (1) during the period from October 1, 2019 to December 31, 2020 (limited to the case where, in the year that is the ninth year counting from the year of moving in, the individual is applying the provisions of this Article, the following Article or Article 41-2-2 pursuant to the provisions of paragraph (6) with regard to the amount of housing loans, etc. for a certified house, etc. prescribed in that paragraph relating to the new construction, etc. of the certified house, etc., or any other case specified by Cabinet Order), and has an amount of housing loans, etc. relating to the new construction, etc. of the certified house, etc. (hereinafter referred to as "housing loans, etc. for a certified house in a special specified acquisition" in this paragraph) in each year from the year that is the tenth year to the year that is the twelfth year counting from the year of moving in (limited to a year in which the individual has continuously used it as his or her residence from the date on which it was used as the residence to December 31 of that year; hereinafter referred to as a "special specified application year for a certified house" in this paragraph and paragraph (1) of the following Article), the individual may, notwithstanding the provisions of paragraph (11), apply the provisions of this Article, the following Article and Article 41-2-2, with the special specified application year for a certified house as the applicable year prescribed in paragraph (1), and with the amount calculated by multiplying the total amount of housing loans, etc. for a certified house in a special specified acquisition as of December 31 of that year (or 50,000,000 yen, if the total amount exceeds 50,000,000 yen) by 1 percent (or the maximum credit for a certified house, if that amount exceeds the maximum credit for a certified house, with any fraction of less than 100 yen in that amount rounded down) as the amount of the special tax credit for housing loans, etc. prescribed in that paragraph for the special specified application year for a certified house. In this case, the phrase "10 years (or 13 years, if the year of moving in is 2022 or 2023 and the housing acquisition, etc. relating to the residence falls under new construction, etc. of a residential house or acquisition of a renovated resale house)" in that paragraph and the phrase "10 years prescribed in paragraph (1)" in paragraph (21) are deemed to be replaced with "13 years"; the phrase "10 years prescribed in paragraph (1)" in paragraph (22) is deemed to be replaced with "13 years", and the phrase "that paragraph" in that paragraph with "paragraph (1)"; and the phrase "10 years prescribed in paragraph (1)" in paragraph (23) and the phrase "10 years (meaning the 10 years prescribed in that paragraph)" in paragraphs (28), (31) and (34) are deemed to be replaced with "13 years".

The maximum credit for a certified house referred to in the preceding paragraph is the amount calculated by multiplying the amount specified by Cabinet Order as the remaining amount after deducting, from the amount of consideration relating to the new construction, etc. of the certified house, etc. that falls under a special specified acquisition, the amount equivalent to the total of the amount of consumption tax and the amount of local consumption tax included in the amount of consideration for the new construction, etc. of the certified house, etc. (or 50,000,000 yen, if that amount exceeds 50,000,000 yen) by 2 percent and dividing the result by three.

If an individual has, in Japan, made new construction of a small residential house (meaning a house used for residential purposes that is specified by Cabinet Order as being small; the same applies in the following paragraph through paragraph (19)) that has received the confirmation under Article 6, paragraph (1) of the Building Standards Act (referred to as "building confirmation" in paragraphs (25) and (26)) on or before December 31, 2023 (hereinafter referred to as a "special residential house" in this paragraph), or an acquisition of a special residential house that has not been used since its construction (hereinafter referred to as "new construction, etc. of a special residential house" in this paragraph), the individual may apply the provisions of paragraph (1), paragraph (31) and paragraph (34), deeming the new construction, etc. of the special residential house to fall under new construction, etc. of a residential house prescribed in paragraph (1), and the special residential house to be a residential house; provided, however, that this does not apply to any year, among the applicable years prescribed in paragraph (1), in which the individual's total income for that year relating to income tax for that year exceeds 10,000,000 yen.

If an individual has, in Japan, made an acquisition of a special renovated resale house (meaning an acquisition, from a real estate broker that carried out specified extension, rebuilding, etc., of a house specified by Cabinet Order on which the specified extension, rebuilding, etc. has been carried out, out of the small residential houses that have been used since their construction and that are specified by Cabinet Order as conforming to earthquake resistance standards (each hereinafter referred to as a "special existing house" in this paragraph and the following paragraph); the same applies hereinafter in this paragraph), an acquisition of a special existing house (excluding an acquisition of a special renovated resale house; the same applies hereinafter in this paragraph), or special extension, rebuilding, etc. of a house specified by Cabinet Order that the individual uses as his or her own residence as prescribed in paragraph (1), the individual may apply the provisions of paragraph (1), paragraph (31) and paragraph (34), deeming the acquisition of the special renovated resale house to fall under acquisition of a renovated resale house prescribed in paragraph (1), the acquisition of the special existing house to fall under acquisition of an existing house prescribed in that paragraph, the special extension, rebuilding, etc. to fall under extension, rebuilding, etc. prescribed in that paragraph, the special existing house to be an existing house prescribed in that paragraph, and the house on which the special extension, rebuilding, etc. was carried out (limited to the part relating to the special extension, rebuilding, etc.) to be a house on which extension, rebuilding, etc. prescribed in that paragraph was carried out; provided, however, that this does not apply to any year, among the applicable years prescribed in paragraph (1), in which the individual's total income for that year relating to income tax for that year exceeds 10,000,000 yen.

If an individual has, in Japan, made new construction of a special certified house, etc. (meaning a house falling under a small residential house that is listed in any of the following items; the same applies hereinafter in this paragraph) or an acquisition of a special certified house, etc. that has not been used since its construction, an acquisition of a special renovated resale certified house, etc. (meaning an acquisition, from a real estate broker that carried out specified extension, rebuilding, etc., of a house specified by Cabinet Order on which the specified extension, rebuilding, etc. has been carried out, out of the special existing houses that are special certified houses, etc.; the same applies hereinafter in this paragraph), or an acquisition of a special existing certified house, etc. (meaning an acquisition of a special existing house that is a special certified house, etc., other than one that falls under an acquisition of a special renovated resale certified house, etc.) (hereinafter referred to as "new construction or acquisition, etc. of a special certified house, etc." in this paragraph), the individual may apply the provisions of paragraph (6), paragraph (31) and paragraph (34), deeming the new construction or acquisition, etc. of the special certified house, etc. to fall under building or acquiring a certified house, etc. prescribed in paragraph (6), the special certified house, etc. to be a certified house, etc. prescribed in that paragraph, the special certified house, etc. listed in item (i) or item (ii) to be a certified house prescribed in paragraph (7), item (i), (b), the special certified house, etc. listed in item (iii) to be a specified energy consumption performance-improved house prescribed in paragraph (6), item (iii), and the special certified house, etc. listed in item (iv) to be an energy-efficient house prescribed in item (iv) of that paragraph; provided, however, that this does not apply to any year, among the special application years for a certified house, etc. prescribed in paragraph (6), in which the individual's total income for that year relating to income tax for that year exceeds 10,000,000 yen.

a house that falls under a certified long-life quality house prescribed in Article 11, paragraph (1) of the Act on the Promotion of Long-Life Quality Housing which is used for residential purposes, and that is specified by Cabinet Order;

a house that falls under a low-carbon building prescribed in Article 2, paragraph (3) of the Act on Promotion of Low-Carbon Cities which is used for residential purposes, and that is specified by Cabinet Order, or a house that falls under a specified building prescribed in Article 9, paragraph (1) of that Act which is deemed to be a low-carbon building pursuant to the provisions of Article 16 of that Act, and that is specified by Cabinet Order;

a house other than those listed in the preceding two items, which is specified by Cabinet Order as a house used for residential purposes that contributes significantly to the rational use of energy;

a house other than those listed in the preceding three items, which is specified by Cabinet Order as a house used for residential purposes that contributes to the rational use of energy.

The term "specified extension, rebuilding, etc." prescribed in paragraph (1), paragraph (6), paragraph (17) and the preceding paragraph means extension, rebuilding or other work specified by Cabinet Order that a real estate broker carries out on a house (limited to one that the real estate broker acquired within two years before the acquisition from the real estate broker referred to in paragraph (1)) (including work for the replacement or installation of equipment that functions as a unit with the house and that is carried out together with that work), which satisfies the requirement that the total amount of expenses required for the work is the amount equivalent to 20 percent of the amount of consideration for the transfer of the house to the individual referred to in paragraph (1) (or 3,000,000 yen, if that amount exceeds 3,000,000 yen) or more, and any other requirements specified by Cabinet Order; the term "extension, rebuilding, etc." prescribed in that paragraph means extension, rebuilding or other work specified by Cabinet Order that the individual carries out on a house the individual owns (including work for the replacement or installation of equipment that functions as a unit with the house and that is carried out together with that work; hereinafter referred to as "extension, rebuilding or other work" in this paragraph), which satisfies the requirements that the amount of expenses required for the extension, rebuilding or other work (or, where a subsidy, etc. (meaning a subsidy or benefit granted by the national government or a local government, or anything equivalent thereto; the same applies hereinafter in this paragraph) is granted with respect to the expenses for the extension, rebuilding or other work, the amount after deducting the amount of the subsidy, etc. from the amount of expenses required for the extension, rebuilding or other work) exceeds 1,000,000 yen, that the house on which the extension, rebuilding or other work was carried out falls under a residential house, and any other requirements specified by Cabinet Order (excluding work to which the provisions of Article 41-19-3, paragraphs (1) through (8) are applied); and the term "special extension, rebuilding, etc." prescribed in paragraph (17) means extension, rebuilding or other work that the individual carries out on a house the individual owns, which satisfies the requirements that the amount of expenses required for the extension, rebuilding or other work (or, where a subsidy, etc. is granted with respect to the expenses for the extension, rebuilding or other work, the amount after deducting the amount of the subsidy, etc. from the amount of expenses required for the extension, rebuilding or other work) exceeds 1,000,000 yen, that the house on which the extension, rebuilding or other work was carried out falls under a small residential house, and any other requirements specified by Cabinet Order (excluding work to which the provisions of paragraphs (1) through (8) of that Article are applied).

Housing loans, etc. are not to include housing loans, etc. in the cases specified by Cabinet Order as cases where the housing loans, etc. bear no interest or bear interest at a significantly low rate.

The provisions of paragraph (1) do not apply to the income tax of an individual for each year within the 10 years prescribed in paragraph (1), if the individual applies the provisions of Article 31-3, paragraph (1), Article 35, paragraph (1) (excluding where applied pursuant to the provisions of paragraph (3) of that Article; the same applies in the following paragraph), Article 36-2, Article 36-5 or Article 37-5 with regard to the income tax for the year that includes the date on which the individual used the residential house or existing house referred to in that paragraph, the part relating to the extension, rebuilding, etc. of a house on which extension, rebuilding, etc. was carried out, or the certified house, etc. referred to in paragraph (6), as his or her own residence, or has applied those provisions with regard to the income tax for the year preceding, or the year before the year preceding, the year that includes the date on which it was used as the residence.

If an individual who has used the residential house or existing house referred to in paragraph (1), the part relating to the extension, rebuilding, etc. of a house on which extension, rebuilding, etc. was carried out, or the certified house, etc. referred to in paragraph (6), as his or her own residence, has transferred, in any year within three years from the year following the year that includes the date on which it was used as the residence, an asset other than the residential house and existing house so used as the residence, the house on which the extension, rebuilding, etc. was carried out, the certified house, etc. so used as the residence, and the land used as the site for those houses (including any right existing on the land) (limited to an asset that falls under residential property prescribed in Article 31-3, paragraph (2), an asset prescribed in Article 35, paragraph (1), or a transferred asset prescribed in Article 36-2, paragraph (1)), and the individual applies the provisions of Article 31-3, paragraph (1), Article 35, paragraph (1), Article 36-2, Article 36-5 or Article 37-5 with regard to the transfer, the provisions of paragraph (1) do not apply to the income tax of the individual for each year within the 10 years prescribed in that paragraph.

The provisions of paragraph (1) and paragraph (6) do not apply to the income tax of an individual for each year within the 10 years prescribed in paragraph (1), if the individual applies the provisions of Article 41-19-4, paragraph (1) or paragraph (2) with regard to the income tax for the year that includes the date on which the individual used the residential house or existing house referred to in paragraph (1) or the certified house, etc. referred to in paragraph (6) as his or her own residence, or for the following year.

If an individual has, in Japan, made new construction of a house used for residential purposes that is specified by Cabinet Order as a house other than one that falls under a house contributing to the rational use of energy (hereinafter referred to as a "specified residential house" in this paragraph), or an acquisition of a specified residential house that has not been used since its construction, and has used the specified residential house as his or her own residence as provided in paragraph (1) on or after January 1, 2024, the provisions of that paragraph do not apply to the income tax of the individual for each year within the 10 years prescribed in that paragraph.

If an individual has, in Japan, made new construction of a non-covered energy efficiency improved house (meaning an energy-efficient house other than one that received building confirmation on or before December 31, 2027 or that was constructed on or before June 30, 2028 (hereinafter referred to as a "covered energy efficiency improved house" in this paragraph); the same applies hereinafter in this paragraph), or an acquisition of a non-covered energy efficiency improved house that has not been used since its construction, and has used the non-covered energy efficiency improved house as his or her own residence as provided in paragraph (1) on or after January 1, 2028, the provisions of that paragraph do not apply to the income tax of the individual for each year within the 10 years prescribed in that paragraph; and if an individual has, in Japan, made new construction of a covered energy efficiency improved house, or an acquisition of a covered energy efficiency improved house that has not been used since its construction, and has used the covered energy efficiency improved house as his or her own residence as provided in paragraph (1) on or after that date, the provisions of paragraph (6) do not apply to the income tax of the individual for each year within the 10 years prescribed in that paragraph.

If an individual has, within a disaster risk area, etc. (meaning a disaster risk area under Article 39, paragraph (1) of the Building Standards Act (hereinafter referred to as a "disaster risk area" in this paragraph), a landslide prevention area under Article 3, paragraph (1) of the Landslide Prevention Act (hereinafter referred to as a "landslide prevention area" in this paragraph), a steep slope failure hazard zone under Article 3, paragraph (1) of the Act on Prevention of Disasters Caused by Steep Slope Failure (hereinafter referred to as a "steep slope failure hazard zone" in this paragraph), a special sediment disaster hazard area under Article 9, paragraph (1) of the Act on Sediment Disaster Countermeasures for Sediment Disaster Prone Areas (hereinafter referred to as a "special sediment disaster hazard area" in this paragraph), or a flood damage prevention zone under Article 56, paragraph (1) of the Act on Countermeasures against Flood Damage of Specified Rivers Running Across Cities (hereinafter referred to as a "flood damage prevention zone" in this paragraph); the same applies hereinafter in this paragraph), made new construction (excluding specified rebuilding) of a residential house referred to in paragraph (1) or a certified house, etc. referred to in paragraph (6), or acquired any of those houses that has not been used since its construction, and has used those houses (including those houses where part of them is located within a disaster risk area, etc.; and, for those houses located within a disaster risk area (limited to an area that does not overlap with a landslide prevention area, steep slope failure hazard zone, special sediment disaster hazard area or flood damage prevention zone), limited to those houses constructed without following a recommendation under Article 88, paragraph (3) of the Act on Special Measures concerning Urban Reconstruction (hereinafter referred to as a "recommendation" in this paragraph) concerning a notification under paragraph (1) of that Article relating to the construction of those houses, in the case where the fact that the person who received the recommendation did not follow it has been made public pursuant to the provisions of paragraph (5) of that Article; hereinafter referred to as a "residential house, etc." in this paragraph) as his or her own residence as provided in paragraph (1) on or after January 1, 2028, the provisions of that paragraph do not apply to the income tax of the individual for each year within the 10 years prescribed in that paragraph; provided, however, that this does not apply if, at the time when the building confirmation relating to the residential house, etc. was received, the whole of the land on which the residential house, etc. is constructed was located outside the disaster risk area, etc.

The term "specified rebuilding" prescribed in the preceding paragraph means the rebuilding of a house specified by Cabinet Order, out of houses that an individual, the individual's spouse or a relative of the individual within the second degree of kinship uses or used as a residence and for which the period specified by Cabinet Order as the period during which it is or was so used is five years or more.

With regard to the application of the provisions of paragraph (1) where an individual who had been applying the provisions of paragraph (1) has become unable to apply the provisions of paragraph (1) because the individual ceased to use the residential house, existing house or house on which extension, rebuilding, etc. was carried out (limited to the part relating to the extension, rebuilding, etc.) referred to in paragraph (1), or the certified house, etc. referred to in paragraph (6), to which that application relates, as his or her own residence due to a change of residence associated with an order of transfer from the person paying the salary or other wage prescribed in Article 28, paragraph (1) of the Income Tax Act relating to the individual (referred to as the "person paying the salary or other wage" in paragraph (31)) or any other unavoidable reason equivalent thereto, and has subsequently used those houses (for the house on which extension, rebuilding, etc. was carried out, the part relating to the extension, rebuilding, etc.; the same applies hereinafter in this paragraph) as his or her own residence again, each year, out of the years within the 10 years from the year of moving in prescribed in that paragraph (meaning the 10 years prescribed in that paragraph), from the year that includes the date on which the individual used those houses as his or her residence again (or, if the individual leased those houses during that year, the following year) onward (limited to a year in which the individual has continuously used them as his or her residence from that date to December 31 of that year (or, for the year that includes the date of the individual's death, to that date)) is deemed to be an applicable year prescribed in that paragraph.

The provisions of the preceding paragraph apply only if the individual referred to in that paragraph has submitted, by the date on which the individual ceases to use the house referred to in that paragraph as his or her residence, a written notification stating the reason prescribed in that paragraph and other matters specified by Order of the Ministry of Finance (where the individual has been issued the certificate referred to in Article 41-2-2, paragraph (7) (including any document specified by Order of the Ministry of Finance as being similar thereto) pursuant to the provisions of that paragraph, limited to a written notification to which the part of the certificate relating to each year from the year that includes that date onward is attached) to the district director having jurisdiction over the location of the house, and the tax return for the first year to which the provisions of the preceding paragraph are applied has attached to it a document certifying that the individual has used the house as his or her residence again and any other documents specified by Order of the Ministry of Finance (referred to as "documents certifying re-occupation" in the following paragraph).

Even where the written notification referred to in the preceding paragraph has not been submitted or a tax return without the documents certifying re-occupation attached has been filed, the district director may, if the district director finds that there were unavoidable circumstances for the failure to submit or attach them, apply the provisions of paragraph (28) only if the written notification and the documents certifying re-occupation are submitted. The same applies where a person to whom the provisions of that paragraph are applied has not filed a tax return and the district director finds that there were unavoidable circumstances for the failure to file it.

If an individual has made a housing acquisition, etc. or building or acquiring a certified house, etc. (each referred to as "housing construction or acquisition, etc." in paragraph (34)), and has used the residential house, existing house or house on which extension, rebuilding, etc. was carried out (limited to the part relating to the extension, rebuilding, etc.) referred to in paragraph (1) for which the housing acquisition, etc. was made, or the house for which the building or acquiring a certified house, etc. was made, as his or her own residence as provided in that paragraph, and, during the period from the date on which it was used as the residence to December 31 of that year, has ceased to use those houses (for the house on which extension, rebuilding, etc. was carried out, the part relating to the extension, rebuilding, etc.; the same applies hereinafter in this paragraph) as his or her own residence due to a change of residence associated with an order of transfer from the person paying the salary or other wage relating to the individual or any other unavoidable reason equivalent thereto (referred to as a "specified reason" in the following paragraph), and has subsequently used those houses as his or her own residence again, the individual may apply the provisions of paragraph (1), deeming each year, out of the years within the 10 years from the year of moving in prescribed in paragraph (1) (meaning the 10 years prescribed in that paragraph), from the year that includes the date on which the individual used those houses as his or her residence again (or, if the individual leased those houses during that year, the following year) onward (limited to a year in which the individual has continuously used them as his or her residence from that date to December 31 of that year (or, for the year that includes the date of the individual's death, to that date)) to be an applicable year prescribed in that paragraph.

The provisions of the preceding paragraph apply only if the tax return of the individual referred to in that paragraph for the first year to which the provisions of that paragraph are applied contains a statement concerning the deduction of the amount to be deducted through the application of the provisions of paragraph (1) pursuant to the provisions of that paragraph, and has attached to it a written statement concerning the calculation of that amount, a document certifying that the house referred to in the preceding paragraph was used as the residence before the specified reason arose, a document certifying that the house has been used as the residence again, a certificate of registered matters and any other documents specified by Order of the Ministry of Finance (referred to as "documents certifying re-occupation, etc." in the following paragraph).

Even where a tax return has not been filed, or a tax return without the statement referred to in the preceding paragraph or without the documents certifying re-occupation, etc. attached has been filed, the district director may, if the district director finds that there were unavoidable circumstances for the failure to file, state or attach them, apply the provisions of paragraph (31) only if a document containing the statement and the documents certifying re-occupation, etc. are submitted.

If a former house (meaning a house for which the individual made housing construction or acquisition, etc. and that the individual had continuously used as his or her residence as provided in paragraph (1); the same applies hereinafter in this paragraph) has become unable to be used as a residence due to a disaster, the provisions of paragraph (1) may be applied, deeming each year, out of the years within the 10 years from the year of moving in prescribed in paragraph (1) (meaning the 10 years prescribed in that paragraph), from the year that includes the date on which it became unable to be used as the residence onward (excluding each year from any of the following years onward), to be an applicable year prescribed in that paragraph:

the year that includes the date on which the former house, the land used as its site or the right existing on the land (hereinafter referred to as "former land, etc." in this item and the following item), or a building or structure constructed on the former land, etc. on or after the date on which it became unable to be used as the residence, was put to use for business or for lease, or was lent free of charge to any of the following persons who share their livelihood with the individual, on or after that date (excluding the case where a person who, owing to a disaster in connection with which the Act on Support for Reconstructing Livelihoods of Disaster Victims (Act No. 66 of 1998) was applied to a municipality (including a special ward), has become unable to use as a residence a former house located within the district of that municipality (referred to as a "person covered by disaster livelihood support" in item (iii)) applies the provisions of paragraph (1) in that year with regard to housing loans, etc. relating to the new construction of a house newly constructed on the former land, etc. on or after that date or housing loans, etc. relating to extension, rebuilding, etc. prescribed in paragraph (19) carried out on the former house on or after that date, or applies the provisions of Article 41-19-4, paragraph (1) or paragraph (2) in that year with regard to a certified house, etc. newly constructed on the former land, etc. on or after that date);

a relative of the individual;

a person who has not filed a notification of marriage with the individual but is in a de facto marital relationship with the individual;

a person other than those listed in (a) and (b) who maintains his or her livelihood with money or other assets received from the individual;

a relative of any of the persons listed in (a) through (c) who shares his or her livelihood with that person.

where the individual applies the provisions of Article 41-5 or Article 41-5-2 with regard to the income tax for the year that includes the date on which the individual transferred the former house or the former land, etc., the year that includes the date of the transfer;

the year in which the individual (excluding a person covered by disaster livelihood support) first applied the provisions of paragraph (1) with regard to housing loans, etc. other than the housing loans, etc. relating to the former house on or after the year that includes the date on which the former house became unable to be used as a residence, or the year in which the individual first applied the provisions of Article 41-19-4, paragraph (1) or paragraph (2) with regard to a certified house, etc. on or after the year that includes that date.

If an individual has acquired a house that has been used since its construction and that is specified by Cabinet Order as a house not conforming to earthquake resistance standards (hereinafter referred to as a "house requiring seismic retrofitting" in this paragraph), and, by the date of acquisition of the house requiring seismic retrofitting, has made the application under Article 17, paragraph (1) of the Act on Promotion of Seismic Retrofitting of Buildings or any other procedure specified by Order of the Ministry of Finance for carrying out a seismic retrofit (meaning extension, rebuilding, repair or remodeling for the purpose of improving safety against earthquakes; the same applies hereinafter in this paragraph) of the house requiring seismic retrofitting on or after that date, and it has been certified, as provided by Order of the Ministry of Finance, that, by the date on which the individual uses the house requiring seismic retrofitting as his or her own residence (limited to a date within six months from the date of acquisition), the house requiring seismic retrofitting has come to conform to earthquake resistance standards through the seismic retrofit (excluding one to which the provisions of Article 41-19-2, paragraph (1) or Article 41-19-3, paragraph (4) or paragraph (6) are applied), the individual may apply the provisions of paragraph (1), paragraph (11), paragraph (31) and the preceding paragraph, deeming the acquisition of the house requiring seismic retrofitting to be an acquisition of an existing house and the house requiring seismic retrofitting to be an existing house.

The provisions of paragraph (1) apply only if the tax return contains a statement concerning the deduction of the amount to be deducted under that paragraph and has attached to it, as provided by Order of the Ministry of Finance, a written statement concerning the calculation of that amount, a certificate of registered matters and other documents.

Even where a tax return has not been filed, or a tax return without the statement or attachment referred to in the preceding paragraph has been filed, the district director may, if the district director finds that there were unavoidable circumstances for the failure to file, state or attach them, apply the provisions of paragraph (1) only if a document containing the statement, as well as the written statement, the certificate of registered matters and the other documents referred to in that paragraph, are submitted.

The provisions of Article 92, paragraph (2) of the Income Tax Act apply mutatis mutandis to the amount to be deducted under paragraph (1). In this case, the phrase "the credit under the preceding paragraph" in paragraph (2) of that Article is deemed to be replaced with "the credit under the preceding paragraph and Article 41, paragraph (1) of the Act on Special Measures Concerning Taxation (Special Income Tax Credit Where a Person Has Housing Loans, etc.)", and the phrase "the amount allowed as the credit" with "the total of the amounts allowed as those credits".

With regard to the calculation of the amount of income tax listed in Article 120, paragraph (1), item (iii) of the Income Tax Act where the provisions of paragraph (1) are applied with respect to income tax for a year, the phrase "Chapter III (Calculating the Amount of Taxes)" in that item is deemed to be replaced with "Chapter III (Calculating the Amount of Taxes) and Article 41, paragraph (1) of the Act on Special Measures Concerning Taxation (Special Income Tax Credit Where a Person Has Housing Loans, etc.)".

Beyond what is provided for in paragraph (6) through the preceding paragraph, necessary matters concerning the application of the provisions of paragraph (1) are specified by Cabinet Order.