For people whose inherited family home has become vacant and who think, "I want to sell it, but I'm worried about the taxes," there is the "¥30 million special deduction on the sale of a decedent's residential property (a vacant home)." If you sell an inherited vacant home that meets certain requirements, you can deduct up to ¥30 million from your capital gains. The deadline for applying it has been extended through December 31, 2027 (Reiwa 9), but the requirements are detailed — such as needing seismic retrofitting or demolition — and note also that the deduction is reduced when there are three or more heirs. This article organizes the requirements and procedures.
What kind of special provision is this (difference from the own-home provision)
Separate from the ¥30 million special deduction for your own home that applies when you sell a house you lived in, this special provision can be used when you sell a house that the deceased person lived in (an inherited vacant home). It was created with the policy aim of curbing the emergence of vacant homes.
Main requirements for eligibility
① It must be the decedent's residential house and its land acquired through inheritance or bequest
② The house must have been built on or before May 31, 1981 and must not be a sectioned-ownership building (a condominium, etc.)
③ The decedent must have lived there alone immediately before the inheritance began (certain cases, such as admission to a nursing home, are also eligible)
④ It must not have been used for business, leasing, or residence from the time of inheritance until the sale
⑤ You must either retrofit it to meet seismic standards and then sell it, or demolish the house and sell the land as vacant land
⑥ The sale price must be ¥100 million or less
The ¥100 million sale-price test is made by also aggregating the proceeds from selling the same vacant home in multiple installments and the proceeds from another heir selling that land (within the application period = through the year-end three years after the inheritance). If you later sell the remainder and the total exceeds ¥100 million, you will need to file an amended return going back even over the special provision you received in the past, so take care[National Tax Agency No.3306 (in Japanese)]. Note also that the cost of demolishing the house and of seismic retrofitting can be deducted from capital gains as transfer expenses.
This special provision covers sales through December 31, 2027 (Reiwa 9). In addition, you must sell by December 31 of the year that includes the day three years after the date the inheritance began. Because you must satisfy both deadlines, it is important to consider your options early after the inheritance.
Key points of the 2024 revision
① When there are three or more heirs, the deduction per person is reduced to ¥20 million (for two or fewer heirs it remains up to ¥30 million as before).
② A case where the buyer carries out the seismic retrofitting or demolition by February 15 of the year following the sale was added as eligible, making it easier to use.
Procedures (a confirmation certificate from the local government is required)
To use this special provision, you need a "confirmation certificate for the decedent's residential house, etc." issued by the municipality where the house is located[Ministry of Land, Infrastructure, Transport and Tourism (in Japanese)]. You file by attaching this certificate, the breakdown statement of capital gains, a copy of the sale contract, a certificate of registered matters, and the like to your tax return. Because issuing the confirmation certificate can take time, check the procedure with the local government before selling.
FAQ
Can I get the ¥30 million deduction for any inherited family home?
No. You must meet all of several requirements, such as: built on or before May 31, 1981; not a sectioned-ownership property; the decedent lived alone; you carry out seismic retrofitting or demolition; and the sale price is ¥100 million or less.
By when do I need to sell?
The application deadline for the special provision itself is December 31, 2027. In addition, there is a deadline of December 31 of the year that includes the day three years after the date the inheritance began, and you must satisfy both.
What is the deduction if three siblings inherit?
For transfers on or after January 2024, when there are three or more heirs, the deduction per person is reduced to ¥20 million (for two or fewer, up to ¥30 million).
Can I use both the own-home provision and the vacant-home provision?
They are special provisions for the sale of different properties. If you use multiple special provisions in the same year, there is a cap on the total deduction (¥30 million per year), so consider the order of application and adjustments across years.
Summary
Reference links (sources)
This article is based on the materials of the following public bodies (neutral, primary sources). Requirements and deadlines are subject to revision, so please check the latest content before selling or filing.
- National Tax Agency No.3306 — Special provision for the sale of a decedent's residential property (a vacant home) (in Japanese)
- Ministry of Land, Infrastructure, Transport and Tourism — ¥30 million special deduction on capital gains from vacant homes (in Japanese)
* This article is general information, not tax advice. For individual judgments, please confirm with a tax office or a tax accountant.