There are many wealthy people who protect their assets by compressing the taxable value of inheritance tax.The reason why some landlords build rental apartments on farmland or vacant land that has been passed down from generation to generation is that there are many examples of the purpose of reducing taxes by reducing land valuation and debt deductions by borrowing construction funds.
Inheritances are also often difficult to predict.Moreover, the grace period for paying inheritance tax is 10 months.In the meantime, we have to negotiate the division of inheritance and raise the tax payment funds.Knowing the appraisal value of the inherited real estate will give you time to think about whether it is better to dispose of it quickly or to operate it as a profitable property.If you can reduce taxes, you should take measures in advance without losing money in an emergency.
This time, I would like to explain the benefits of buying a rental apartment from the perspective of inheritance tax reduction.
table of contents
Inheritance tax measures in lowering the valuation
When considering inheritance tax measures, the main focus is to keep the assessed value of real estate subject to taxation low.Although we follow the provisions of the Basic Notification on Inheritance Tax Property Valuation, the inheritance tax assessed value of real estate calculated according to this does not necessarily match the market value.The difference between the inheritance tax assessed value and the market value, and the use of devaluation under laws and regulations are measures to reduce the taxable amount.
reference:National Tax Agency Basic Notification on Inheritance Tax Property Evaluation
If you inherit cash of 1 million yen as it is, the taxable amount is 100%, but if you buy land, it will drop to 80% (about 8000 million yen).Also, if there is a rental property on the land you own and it is rented to someone else, it will become a rental housing construction site and the land you can use freely like your own home (own land) will decrease, so the assessed value of the land will drop by about 20%. (approximately 6400 million yen at this point).
So far, we have used the following two devaluations:
Devaluation of leased land: Appraisal value of privately owned land x (1-leasehold land rate x leasehold right rate x rental rate)
Devaluation of rented house: fixed asset appraisal value x (1-tenancy rate 30% x rental rate)
Furthermore, in inheritance, it was further reduced by 200% (about 50 million yen at this point) by using the “special case for small residential land (50% reduction up to 3200 mXNUMX)”.
In this way, by utilizing the difference between the inheritance tax assessment value and the market price and the devaluation of the land for rented houses, it is possible to reduce the assessment value to about 3200 million yen.
About exceptions such as small residential land
It is a system that reduces the appraisal value of the land owned by the decedent by 50% or 80% when certain conditions are met, and it can be seen that it is an important factor in inheritance measures.In some cases, the inheritance tax may be XNUMX, so be sure to hold it down.However, there are some conditions that must be checked to see if they can be met.
applied to land
According to the description of the National Tax Agency below, it can be understood that it is applied to inherited residential land (land).
“Among property acquired by an individual by inheritance or bequest, the decedent or relatives of the decedent who lived with the decedent immediately before the commencement of inheritance (hereinafter referred to as “decedent, etc.”) ) used for business or residence (meaning land or rights existing on the land; the same shall apply hereinafter), if there is a certain For the part up to a certain area (hereinafter referred to as "small-scale residential land, etc."), the ratio listed for each category listed in the table in XNUMX below for the purpose of calculating the value to be included in the taxable value of inheritance tax. will be reduced. ”
In addition, the target residential land, etc., is residential land for specified business (land used by the decedent or relatives for business other than real estate lending business, parking lot business, bicycle parking business, etc.), specified residential land, etc. ( land where the decedent or relatives lived), residential land for lending business, etc. (land used by the decedent or relatives for businesses such as real estate lending, parking, bicycle parking, etc.) .
Required documents
・Details of application of special provisions for small-scale residential land, etc.
・Copy of family register or statutory inheritance information
・Copy of will or inheritance division agreement (attached seal certificate)
This must be done within the deadline.Inheritance tax returns must be filed within 10 months from the day following the date on which the inheritance was discovered.
No gift tax relief
Donors related to residential land, etc. acquired by gift related to taxation for settlement at the time of inheritance and special business beneficiaries who have received the application of "deferral and exemption from tax payment of gift tax on personal business assets" or "individual business assets This exception cannot be applied to residential land, etc. for a specific business acquired by inheritance or bequest from a decedent pertaining to a special business heir, etc. who is subject to the application of inheritance tax payment postponement and exemption. ”
As an inheritance measure, the advantage of giving a taxable gift for settlement at the time of inheritance is that by changing it to a profitable property and donating it, you will be able to secure funds for tax payment from the rent. That is the key.
Summary
- The key to inheritance tax measures is to keep the appraisal value of real estate low.
- For that reason, there are write-downs of land for rented houses and write-downs of rented houses.
- In addition, the appraisal value can be greatly reduced by special measures such as small-scale residential land at the time of inheritance.
- Exceptions for small-scale residential land, etc. do not reduce the gift tax, so it is important to prepare the amount to be paid from the income when using the gift tax settlement at the time of inheritance.
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
