It’s been reported that Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) is considering a plan to raise the tax burden on investors who flip condos for a quick resale. Under the current system, if you’ve owned the property for five years or less as of January 1 of the year you sell (a “short-term transfer”), the tax rate is 39.63%; if you’ve held it for more than five years, it drops to 20.315% — meaning long-term holders get a much lighter tax bite. The news sparked debate on 5ch over whether this would actually curb speculative short-term flipping, whether soaring construction costs mean prices won’t come down regardless, and whether the whole plan is toothless if foreign investors can simply skip out of the country without paying.
The Ministry of Land, Infrastructure, Transport and Tourism is calling for tax measures to curb speculative short-term flipping of condos. Within the government and ruling party, a plan to raise the tax burden on properties sold shortly after purchase is reportedly under discussion.
Currently, when an individual sells a condo, the tax rate differs depending on how long they owned it.
If the ownership period is five years or less as of January 1 of the year of sale (a “short-term transfer”), the combined tax rate on the sale profit is, in principle, 39.63%. If it exceeds five years (a “long-term transfer”), the rate is 20.315%.
Source: news.yahoo.co.jp / Original article here
Real estate prices overall aren't crashing.
It's mainly condo prices and REITs that are crashing.
It's over.
The contract would just specify who's on the hook for the tax at the time of sale, right?
Can you even register the transfer without paying the tax first?
Prices drop, easier to buy in.
Guess the ones who got played were the 30- and 40-somethings.
I'm not Gen Z, but the crash was obvious from a mile away, so I've been saving up cash to buy outright once the idiots who can't keep up with payments are forced to tearfully let go of their condos lol
The yen was strong, so material quality was high relative to price.
Now even a crappy house runs you 100 million yen.
It's sad, honestly.
Sure, but there were no jobs and tons of companies were going under back then.
Wanting to go back to that nightmare era just because prices were cheap is some weak-brained thinking, honestly impressive.
An era where nominal wages kept falling but real wages went up was supposedly "the best"…?
They kept forcing construction through despite soaring material costs because units were selling.
Once units stop selling, the whole building boom grinds to a halt in the first place.
Guess new towers just stop going up from here on.
And on top of that, foreigners are buying up everything anyway.
They've thrown up tower condos like crazy — do they even have a plan for what happens to these in 40 years?
Probably ends up like China right now — a pile of empty, crumbling buildings nobody wants.
There's no "who's on the hook" question.
The seller just files and pays the tax the following March, that's it.
They'd probably just dock that amount off the sale price, I'd guess.
That story was about them pulling back on new builds, right?
Daiwa House is doing real estate development in China lol
They're gonna get wrecked when that bubble pops.
Once the building gets old, the value drops to basically zero.
Apparently Tokyo's ¥100-million-plus luxury condos specifically tend to hold their value.
Otherwise real estate companies couldn't operate in the first place.
Real estate agents are mostly just brokering deals, they barely own any property themselves.
That's not true.
Sales brokerage isn't the only thing real estate companies do.
For reference, in the greater Tokyo area, 30-40% of used condos go through buy-and-resale (firms buying units outright to flip).
For buildings over 30 years old, that figure is said to be closer to 60%.
Moving money from one hand to the other gets counted as "producing" something — that's just how today's economic indicators work.
In that case maybe they should just handle redevelopment themselves then.
No idea who'd actually step up to do it though.
It's a tax on sale profits, so there's no reason to renounce an inheritance over it.
No way that's true.
More people are going to pile into the short-term flipping market because of this.
Nah, that won't happen — it'd just mean even fewer people buying.
Stocks are the real bubble here.
When the AI bubble bursts, this condo stuff will look like nothing lol
Even when bubbles burst, if you just hold tight (diamond hands),
even the shoeshine boy would be a billionaire by now.
Black Monday, the Lehman shock — without exception, they all proved that holding the physical asset is king.
Japan's bubble burst: Nikkei average, down 82%, took 34 years to recover.
Dot-com bubble burst: NASDAQ 100, down 78%, took 15 years to recover.
China's stock bubble burst: Shanghai Composite, down 69%, still hasn't recovered 19 years later.
And those are just the indices — mutual funds keep charging fees even while they're falling, so you lose even more and it takes even longer to recover.
If the AI bubble bursts, the amount of money companies have poured in dwarfs all of these, so the scale of the crash would be on a level we've never seen before. These days it's AI doing the trading, not humans, so the chain of selling has no visible bottom — there's a real chance it never recovers in your lifetime.
At the end of the day, it's nothing but a gamble.
Still better than holding cash.
Case closed.
Maybe if you're already an old geezer, sure lol
Background and Key Points of Debate
Currently, tax on condo sale profits is split by ownership period: roughly 39.63% for short-term transfers of five years or less, versus 20.315% for long-term transfers over five years — nearly double. The MLIT is reportedly considering raising the tax burden on short-term transfers even further, aiming to curb speculative purchases made purely for resale. The thread split mainly on one question — will prices actually fall? Some argued that fewer buyers means lower prices, while others countered that soaring construction costs will keep prices high regardless. There were also concerns about enforcement: since the tax is self-reported and paid by the seller the following year via tax filing, it may have little real effect if foreign investors simply leave the country without paying. Commenters also raised finer points, like dodging the tax by incorporating, or how buy-and-resale firms would be treated — as of this article, exactly how far the policy’s scope will reach remains undecided.
*This article is compiled from excerpts and a summary of the 5ch (Nandemo Jikkyo G) thread “[Bad News] MLIT Considers Heavier Taxes on Short-Term Condo Flipping, Real Estate Investors Done For.”
