Kyoto is considering a tax on holiday home owners

Kyoto City is looking into introducing a tax on holiday home owners. In recent years, the number of out-of-town buyers of homes and apartments in the historic city has grown. The homes sit empty for most of the year while the owners do not provide much in the way of tax revenue, leaving locals to carry the costs of maintaining the city’s infrastructure, and various local activities and programs.

Furthermore, increasing tourist numbers have led to intense competition for hotel development sites, pushing up real estate prices in the inner city areas to levels that are now unaffordable for the younger population.

Details on how to define a holiday home and how much tax to apply has yet to be decided by the city.

In 1976, Atami City in Shizuoka Prefecture introduced a besso (holiday home) tax on holiday homes. The tax applies to home owners who are not registered as city residents. Atami is the only place in Japan with this holiday home tax.

Atami’s annual besso tax is 4,400 Yen plus the building size multiplied by 650 Yen. A 100 sqm house would have a besso tax of 69,500 Yen per year. This tax applies to 9,200 homes in Atami, including 7,800 resort-style apartments.  In 2015 the city collected 542 million Yen. The tax revenues go towards city expenditures such as road maintenance and garbage collection.

Source: The Kyoto Shimbun, May 15, 2017.

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