To qualify for the mortgage deduction, you must not only meet the requirements, but also file a tax return and make year-end adjustments. Here we will look at the procedures and points of note for the first and second years and beyond.

Procedures for the First Year

In the first year you are eligible for the mortgage deduction, you are required to file a tax return. A tax return is a procedure to report one year’s income and taxes to the tax office between February 16th and March 15th of the following year in order to confirm and settle any excess or deficiency in taxes.

The first year of the mortgage deduction is processed in the year following the year of occupancy. Attach the following required documents to your tax return and submit them to the head of the tax office where you pay your taxes.

Required Documents for Tax Returns

DocumentsPlace Where Available (Source)
Final Income Tax ReturnIRS Website or Your Local Tax Office
(Statement of Calculation of Special Deduction for Loans for Dwelling, etc. (Specified Extension or Renovation, etc.)IRS Website or Your Local Tax Office
Proof of Mortgage BalanceFinancial Institution(s)・Bank
Certificate of Withholding Tax Form (from employer)Employer
Certified Copy of the Land and Building RegistryAt the counter of the Legal Affairs Bureau or through the online application system
Copy of the Building Contract or Sales
Construction companies and real estate agencies
*Required on tax returns up to those moving in 2022, but not required for those moving in 2023 or later.
My Number Card(Identification Document)Municipal Office
Documentation showing Housing Performance (if available)Construction and or Real Estate Company

Documents should be obtained from the tax office, the financial institution from which you took out the loan, the real estate company, or the Legal Affairs Bureau.

You must complete and prepare your own tax return and statement of calculation of special deduction for housing loans based on the designated forms.

Tax Return Process

Tax returns can be filed at the tax office that has jurisdiction over the area where you live during the filing period from February 16 to March 15 each year. After preparing the required documents, you can bring or mail them to the tax office, or you file online.
To file online, have the necessary documents on hand and access the National Tax Agency’s tax return preparation corner.
Follow the instructions to complete the form, and the calculations will be done automatically.

If you do not know how to file a tax return or would like more information on how to fill out the form, you can consult directly with the tax office.

If you are filing a tax return only to receive the mortgage deduction, you do not need to wait until February 16 to file the first return, as long as it is filed after January 1 of the year following the year in which you took up residence.

Procedures and Notes for the Second and Subsequent Years

Although the mortgage deduction procedure itself is required every year, it is not necessary to file a tax return every year. For company employees, the mortgage deduction can be applied for during the year-end adjustment process conducted by the company from the second year onward. At the time of year-end adjustment, submit the necessary documents, such as documents received from the tax office and bank balance certificates, to your employer.

However, those who are not subject to the withholding tax system, such as freelancers and sole proprietors, are required to file an income tax return as in the first year.
Attach the necessary documents for the application for the mortgage deduction and submit them to the tax office.

If you forget to follow the procedures, file for a refund.

Just because you have taken the mortgage deduction once does not mean that you are automatically eligible for the deduction in the second and subsequent years. Nevertheless, there is a possibility that you may inadvertently forget to complete the procedures.

In the unlikely event that you forget to file your tax return or year-end adjustment, you can file for a refund. If you want to receive a refund for the mortgage tax credit, etc., you can file at a later date even if you forget to do so initially.
Since there is a fixed deadline, if you realize that you have forgotten to file, please consult the tax office and file for a refund as soon as possible.

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