Japan Wooden House Depreciation Nta National Tax Agency Rules
When you invest in or buy a secondhand wooden house in Japan (detached or wooden apartment) for rental income, accelerating depreciation by exploiting its short statutory useful life is a common and perfectly legal tax move. Every depreciation period, residual value treatment, and depreciation expense calculation must strictly follow the National Tax Agency’s statutory guidance.
1. Statutory Useful Life Table for Buildings (Official Baseline)
The NTA’s official useful life standards for various building structures and attached equipment (the baseline for wooden houses is 22 years).
2. Depreciation Period Calculation Rules for Secondhand Assets (Simplified Method)
For secondhand wooden houses that have exceeded or partially exceeded their statutory useful life, the NTA spells out the official simplified formula (fully aged-out wooden houses get 22 years x 20% = 4-year accelerated depreciation).
3. Depreciation Expense Booking and Filing Instructions
Official guidance on how to calculate the current-year depreciation cap for your tax return, the principles for splitting building and land values, and the straight-line method filing requirements.
4. Building Purchase Contracts and Land/Building Price Allocation Standards
Before you can calculate depreciation, you need to establish the building principal versus non-depreciable land principal ratio based on the fixed asset tax assessment or the purchase contract. For official fixed asset assessment and registration rules, refer to the Legal Affairs Bureau and Ministry of Internal Affairs and Communications local tax standards.