Hi,
In laws are giving my partner a land plot where we plan to build a house.
I have many questions regarding the gift tax + build a house, but here are the ones that are currently the most important ones for me.
– is there any way to reduce gift tax ? The plot is in inaka close to river so within the flood area, I doubt of its value but if I can save few hundred thousands yen I would save them. (Will post in japanfinances as well)
– we would like a house that fits somehow what we want to have (number of rooms, type of rooms, cabling…). Is this what we call “自由計画”, or is it “注文住宅”?
– we are married, will I own 50% of the land ? Or is it 100% to my partner ?
Any advice from anyone with experience in house building is welcome. For the area, we are very fine even if it’s within the flood area. We are 10 seconds away from in laws which is perfect. And we are in the safest point of the flood area (I guess there is a bit of a slope)
2 comments
I’m sure you’ll get better answers from Japan finance… here’s my recollection:
To effectively reduce tax, locals skip a generation when gifting.
Ownership is personal.
If they choose to give 50% to you and 50% to your partner, then you each have the 100万円 deduction before taxes start to set in. This could save quite a bit in taxes, but of course it depends on their wishes as to whether they want you to own 50%.
If it’s given just to one person (e.g. your partner) and your partner passes, you’ll get half the value tax free and have the other half subject to inheritance tax. If you each own 50%, then the part subject to inheritance tax is half, but then your partner would face the same dilemia if you’re the one that passed first.
To sum it up, talk to a professional.