Gift tax on property purchase

Hi,

I am about to purchase a property in Japan and I just heard from the seller that I might need to pay a gift tax as the estimated value of the property is much higher than the amount I will be paying.

Based on my research, I am paying market price for the property. I have asked my agent that the estimated value is only used for annual property tax purpose and is not related to the market price.

Any ideas if I will need to pay this gift tax? I am not related to the seller. Would I automatically receive a bill for this tax or I will need to lodge a tax return for this gift tax?

Thanks

gift tax ?
which tax do you mean �s���Y�擾�� or ���^�� ?
or other tax ?
�s���Y�擾�� will be charged once when you buy properties.
���^�� will be charged when someone gives money or valuables to you.

Gift tax as in ���^��.

I am purchasing a property, not given a property. But the seller mentioned that I might get charged a ���^�� due to the property valuation is much higher than the price I am paying (which is market value).

I'm not sure if I need to pay this ���^��.

Thanks

I know nothing of the specifics of Japanese gift tax regulations, so I am speaking just in generalities based common sense. You should contact a Japanese zeirishi for a precise answer.

If you are truly paying market value, I wouldn't worry about what the seller says. (unless he is in charge of property assessments for the area! ...I'm joking)

It sounds like a tactic to try and scare you into paying more, or maybe just a throw-away comment to make you feel you are getting a really good deal.

Ask yourself, if the seller was happy with the deal, why would he care if you have to pay gift tax or not?

Now, if the seller is a family member or something, that could possibly be a whole different situation, and you should seek expert advice.

if you(the buyer) buy a property at very cheap price, this means that the seller give money to the buyer.
an example is:
the seller bought that property at 3,000,000 yen in an old time. Now, the seller sells it to you at 4,000,000 yen. but the actual market price is 10,000,000.
you buy it at 4,000,000 yen and you get a money gift of 6,000,000 yen from the seller.
the seller declares 1,000,000 yen income gain.

no one wants to sell the property at a cheap price. if the above situation happens. tax office will realize that the seller receives back-money (cash) of 6,000,000 yen from the buyer. the seller evades the tax. or, the buyer gets a gift.

to all of the property sellers and buyers, tax office will automatically and independently send letters in which they ask the buying and selling prices and related information. if you ignore to respond the letter, they will know the trade is unusual and suspicious.

there is a price �H����, which is calculated from the real last year's trades. that is the last year's market price. if your trade price is much lower than the �H����, tax office will easily know the trade is unusual.

what will happen near future:
tax office gently asks you (the buyer) come to their office to explain the difference of your trade price and �H����.
if you can't explain the price difference. they will tell you that you should report a gift tax honestly. after you declare the gift tax, they will charge you additional penalty tax(un-report) and interest(report delay). (then, everything has done.)
if you refuse to declare it, they will officially charge the tax. you might be judged as a tax evader.(much worse) then, you have to pay the tax and the (more) penalty and more interest.
most of Japanese declare a gift tax.
if you ignore all process, they will sue you to the court to get the tax(they may sell your property).
if you have an argument against their decision of charging tax, you can sue to ���ŕs���R����.

How can the tax agency assume that the sale price would be similar to the �H����? There will always be differences, especially if the seller is a motivated seller.

For the calculation of the gift tax, the tax agency will ask you to pay tax on the differences between the sale price and the �H����?

if you made your trade at market price, there is no reason for you to worry about that.

That's good. Thanks