Taxes and Filing

What type of income is minpaku income?

Materials from the National Tax Agency (国税庁) classify minpaku income as follows.

• General rule: Income from a minpaku using the home you live in is, as a rule, miscellaneous income
• Business income: When it is clear that the minpaku is run as a business, for example when you make your living mainly from minpaku income
• Real estate income: When a person who rents out real estate runs a minpaku temporarily between tenancies, the income may be included in real estate income

Expenses shared between personal use and minpaku use, such as utilities and fixed asset tax, are divided by a reasonable method, such as the ratio of floor area, and the minpaku portion is deducted as an expense.

Consumption tax

• Accommodation fees are subject to consumption tax, just as with hotels and ryokan
• For individuals, if taxable sales in the year before last were 10 million yen or less, you are generally exempt from paying the tax
• You are not exempt if, for example, taxable sales from January to June of the previous year exceeded 10 million yen (this can also be determined by the amount of salaries and similar payments)
• If you are registered for the invoice system (as a qualified invoice issuer), you are not exempt even if your sales are 10 million yen or less

Accommodation tax

This tax is paid by guests and collected and paid by the operator. In Tokyo, for stays from April 1, 2027, the rate is scheduled to change to a flat 3% (not charged on stays under 13,000 yen per person per night), and minpaku are also scheduled to be covered. Other local governments are also introducing or considering it. → Accommodation tax

Fixed asset tax and the mortgage tax credit

• Fixed asset tax: Whether the special provision for residential land applies is to be judged not by whether the property is used as a minpaku, but by how the building is actually used (notice from the Ministry of Internal Affairs and Communications (総務省))
• Mortgage tax credit: According to National Tax Agency materials (based on the law as of 2018), when a minpaku is run in a home used as your main residence, eligibility is judged by whether the portion used for living exceeds one half of the floor area, and the credit amount is also calculated based on the living-use ratio. Please check with the tax office how this is treated under the current system

Points to note when filing

• Keep records of sales and expenses, along with receipts and similar documents
• Organize booking site fees, cleaning costs, management fees, supplies and similar items
• If you are unsure how to classify income or allocate expenses, consult a tax accountant or the tax office