Japan's Mortgage Tax Credit from 2026: Who Qualifies, How Much, and How to Claim

The short answer

If you buy a home to live in with a mortgage in Japan, you can claim the mortgage tax credit (jutaku loan kojo). Each year, 0.7% of your year-end loan balance is deducted directly from income tax, and anything income tax cannot absorb comes off your resident tax. For most resale condos the credit runs for 10 years; homes with certified energy performance get up to 13 years^[2]. The scheme has been extended to cover homes occupied by December 31, 2030^[3]. How much you actually receive, however, depends on the home's energy class, its floor area, your income and your household, so not every property gets the maximum.

The framework from 2026: 0.7%, 10 to 13 years, caps by home type

The credit equals the year-end loan balance (or the purchase price, if that is lower) multiplied by 0.7%, compared with an annual cap, whichever is lower^[1]. The cap depends on the type of home. For resale (existing) homes occupied between 2026 and 2030, it is^[2]:

• Certified long-life or certified low-carbon homes: 13 years, up to 245,000 yen a year^[2];
• ZEH-level energy-efficient homes: 13 years, up to 245,000 yen a year^[2];
• Homes meeting the energy-efficiency standard: 13 years, up to 140,000 yen a year^[2];
• Other homes (most resale condos without an energy certificate fall here): 10 years, up to 140,000 yen a year^[2].

Working backwards at 0.7%, the 140,000 yen cap corresponds to a loan balance of 20 million yen and the 245,000 yen cap to 35 million yen; any balance above that does not increase the credit^[2].

Newly built homes have higher caps: up to 315,000 yen a year for certified homes, 245,000 yen for ZEH-level homes, and 140,000 yen for standard-compliant homes occupied in 2026 or 2027, all for 13 years. New homes that do not meet the energy standard are in principle excluded, except in cases such as building confirmation obtained by the end of 2023^[1]. From 2028, new homes in designated "disaster red zones" such as special sediment-disaster warning areas will also be excluded, but existing homes are not subject to this rule^[3].

Higher caps for families and young couples

You count as a "special eligible individual" if, as of December 31 of the year you move in, you are under 40 with a spouse, are 40 or over with a spouse under 40, or have a dependant under 19. For resale homes, the cap then rises to 315,000 yen a year for certified and ZEH-level homes and 210,000 yen for standard-compliant homes^[2]. There is no uplift for "other homes"^[2].

Key conditions: floor area, income, seismic standard and move-in

• Floor area: measured on the property register; in principle at least 50 sq m, with at least half used as your own residence^[2]. From 2026 the minimum was relaxed to 40 sq m for both new and existing homes, but homes of 40 to under 50 sq m require total income of 10 million yen or less and cannot use the family uplift^[3]. Registered floor area for condos is measured to the inside of the walls, so it is usually smaller than the advertised figure; check it first for units near 40 or 50 sq m.
• Income: total income of 20 million yen or less^[2].
• Seismic standard (resale): the building must date from January 1, 1982 or later, or have a seismic-compliance certificate issued within two years before purchase^[2]. Older condos need particular care.
• Move-in and loan: you must move in within six months of acquisition and still live there on December 31 of each claim year; the loan must be repaid over 10 years or more; and you cannot buy from a relative in the same household or another specially related person^[2].

Two worked examples

Example 1: You buy a resale condo in Osaka with no energy certificate ("other home"), and the year-end balance in the first year is 30 million yen. 30 million x 0.7% = 210,000 yen, but the cap is 140,000 yen, so the credit that year is at most 140,000 yen^[2]. If your income tax that year is only 100,000 yen, the remaining 40,000 yen comes off the following year's resident tax. For move-ins from 2026 to 2030, the resident-tax portion is capped at 5% of taxable income for income-tax purposes, up to 97,500 yen^[4].

Example 2: A 35-year-old buyer with a spouse purchases a certified ZEH-level resale condo with a year-end balance of 40 million yen. 40 million x 0.7% = 280,000 yen, which is below the special-individual cap of 315,000 yen, so up to 280,000 yen can be credited^[2]. As the balance falls each year, the credit shrinks with it.

How to claim: tax return in year one, payroll adjustment afterwards

In the first year you must file a final tax return yourself, attaching the calculation statement, the year-end balance certificate from your lender, the register certificate and a copy of the sales contract; claiming a ZEH-level or similar category also requires the matching performance certificate^[1]. From the second year, salaried employees can hand the credit certificate sent by the tax office and the year-end balance certificate to their employer and have it processed in the year-end payroll adjustment^[1]. The resident-tax portion needs no separate filing with the city; it is calculated from your income-tax filing^[4].

Summary

Three things drive the size of the credit: whether the home has an energy-performance certificate, whether its registered floor area reaches 50 sq m, and whether you qualify as a family or young-couple household^[3]. With resale condos, an energy certificate usually needs to be confirmed with the seller or management company during the transaction, and it can be hard to obtain afterwards. The credit also only offsets tax you actually pay, so lower earners may not reach the cap. Please confirm your own eligibility with the tax office or a tax accountant. If you would like to check floor area, building age and certificates while you are still viewing properties, feel free to get in touch through our contact form.