Hello,
I am German and have been residing in Japan vor almost 15 years now. I have a permanent residence and have to pay taxes in Japan for everything I earn or own anywhere in the world. Yay! 🙂
Lately the topic of inheriting the estate property from my parents has come up and in Germany it is quite common to gift the property to their children during their life-time in return for a life-time free residence agreement. This is to prevent that the property may have to be auctioned off in case one or both parents become dependent on care and cannot pay for it from their pension. The only condition that has to be meet is that they will have to stay healthy another 10 years.
However, when it comes to Japan, it seems that due to the very high tax on gifts this may not be a viable option. According to what I could find on the internet I may have to pay up to 55% of the property value in tax if I receive it as a gift. Compared to "only" 20% for a similar property value if I inherit it.
I wonder if anyone is or has been in a similar situation and can confirm that inheriting is indeed the only real option? Also, if there are other options I am open to suggestions 🙂
Rather than trying to get around paying taxes in Japan it is to make sure that I will actually inherit the property. There is a 50%+ chance that the well-fare state Germany will get it if I bet on just waiting for inheritance. However, 55% gift tax is not really acceptable either.
It seems that in Germany thanks to rather high tax exemptions I would not have to pay any inheritance tax.
The gifting procedure seems to be generally accepted and is tax-free, however I may have to pay taxes on a "virtual" rent even though my parents are not paying any. 2:0 for inheritance it seems.
btw. I will try to also get an official confirmation from the local tax office… but since emails are still not a thing it may take a while…
by sebaschan-san