How to transfer title of the house to the wife

[trajan]

As the subject reads, how does one go about transferring the title of a house to a spouse?

Also, what is the cost of the procedure?

The house is fully paid and on my name.

Thank you all in advance.

[Haystack]

CHANGING THE OWNERSHIP SHARE AFTER PURCHASE:
It may be possible to add joint owners or change the ownership ratio after purchase. Please contact a judicial scrivener to register the change.

https://japanpropertycentral.com/real-e ... -in-japan/

It may be possible, but you need to be very careful of possible gift tax complications. You need to contact an specialist.

[Tkydon]

The transfer would be subject to Gift Tax.

If you die within 3 years of the transfer, the Gift will be reassessed as Inheritance, and if necessary, liable for additional Inheritance Tax.

If you have not been married for over 20 years, then anything over Y1.1M will be assessed for Gift Tax.

If you have been married for over 20 years, then your wife is entitled to the Spouse Property Tax Exemption.
This is a Once In A Lifetime per person allowance for transfer of primary residential property, or funds to purchase a primary residence property in addition to the Y1.1M Standard Gift Allowance. The amount of the Spouse Property Tax Exemption is currently Y20M, so in that year, the total Tax Free Gift amount would be Y21.1M. (Once In A Lifetime for the spouse... The donor could do multiple times... at greater than twenty year intervals...)

Anything over Y21.1M in that year, and your spouse would be liable for Gift Tax on the excess amount.

Gift Tax Rates
Band Marginal Tax rate (％) - to Max Tax in Band Yen
Under 1,999,000 10% Y200,000
2,000,000 2,999,000 15% Y150,000
3,000,000 3,999,000 20% Y200,000
4,000,000 5,999,000 30% Y600,000
6,000,000 9,999,000 40% Y1,600,000
10,000,000 14,999,000 45% Y2,250,000
15,000,000 29,999,000 50% Y7,500,000
Over 30,000,000 55% No Limit...


The spouse exemption for gift tax is the value of residential property acquired by gift from the taxpayer's spouse, or the money acquired similarly for purchasing such a property. This exemption is applicable under the following conditions:
1. The residential property should have been used as a dwelling by the spouse, and should be expected to be used continuously as a dwelling.
2. It is deductible only once in a taxpayer's lifetime for each spouse of the donor with a maximum of Y20M. Moreover, the exemption is deductible only if the taxpayer has held the status of spouse of the donor for twenty years or longer. (Inheritance Tax Law Article 21 - Paragraph 6).


The transfer of the property would also be subject to Stamp Duty.

[trajan]

Thank you for the quick replies.

I have a little difficulty parsing the information. My apologies.

We have indeed been married for more than 25 years and been living continuously in the house for over 10, which could be said to cost ~30 million.

Now, she is my dependent, has no income to speak of (or ever paid any taxes), and the goal of this transfer is to settle matters ahead of a potential inheritance situation which, possibly, might not be the best strategy.

Thoughts?

[RetireJapan]

Thank you for the quick replies.

I have a little difficulty parsing the information. My apologies.

We have indeed been married for more than 25 years and been living continuously in the house for over 10, which could be said to cost ~30 million.

What is the property value for tax purposes (this might be the same as property taxes, can anyone confirm?). Basically you can go and ask the tax office what (if any) her tax liability would be if you gifted the house to your wife, and make the decision based on that.

[Haystack]

Thank you for the quick replies.

I have a little difficulty parsing the information. My apologies.

We have indeed been married for more than 25 years and been living continuously in the house for over 10, which could be said to cost ~30 million.

Now, she is my dependent, has no income to speak of (or ever paid any taxes), and the goal of this transfer is to settle matters ahead of a potential inheritance situation which, possibly, might not be the best strategy.

Thoughts?

1. Japanese tax law is designed to prevent you from sending and receiving assets without paying tax.

2. These rules apply to spouses too.

3. There are exception foe inheritance after death, but everything follows well established rules.

The law is basically setup to prevent what you want to accomplish, a tax-free transfer of assets.

[trajan]

Yes, the property value for tax purposes is below 20 million.

Which professional handles this type of transfer in Japan? By this I mean who is the local equivalent of a lawyer for these matters.

[Beaglehound]

Yes, the property value for tax purposes is below 20 million.

Which professional handles this type of transfer in Japan? By this I mean who is the local equivalent of a lawyer for these matters.

I think a 司法書士 (shihoshoshi) would be the professional involved. When we used one to register ownership the initial consultation was free. The tax office would be able to advise too though. I wasn’t aware that the spousal allowance detailed by Tkydon was applicable to transfers, I thought it was for building or purchasing, but if that is correct you would seem to qualify for that, and if the assessed value is under 20million it could be plain sailing.

[trajan]

Thank you all. I think I can take the issue of the property title from here.

It had not occurred to me that there would be any tax, "gift", or limitations on what seemed to me to be the allocation of conjugal assets.

Now I wonder about the few million yen I have yearly transferred to her account for decades (so she can shop whatnot as she sees fit).

Does this too constitute some form of gift or is limited in any way?

She has purchased all sorts of things over time (including vehicles and so on) and, moving forward, might also consider buying stocks, etc.

[northSaver]

1. Japanese tax law is designed to prevent you from sending and receiving assets without paying tax.

2. These rules apply to spouses too.

3. There are exception foe inheritance after death, but everything follows well established rules.

The law is basically setup to prevent what you want to accomplish, a tax-free transfer of assets.

I too am confused by this "gift tax". We transfer money all the time from my bank account and business account to my wife's PO account because that's where the credit cards, most taxes and a lot of other bills are paid from. Surely the amount over 1.2M isn't subject to gift tax?

We transfer money to our children too for living expenses while at university. It's only 600K each because they have student loans, but I know people who give their children more than 1.2M each per year. Surely not subject to gift tax?

Another example: my wife's grandma kindly lent us 6M when we bought our house. We paid it back in full over time (regularly each month) and made a contract too, though probably not legally binding. Was that subject to gift tax?

Or maybe I've got it wrong. Perhaps gift tax is only paid on gifted property (physical buildings), and not other kinds of assets? Anecdotally my wife and I have never heard of anyone paying this tax in the above situations. I wonder if it's one of those things that the authorities turn a blind eye to? Don't get me wrong, we don't shirk on taxes and have always paid what we thought was due in the past, both in Japan and the UK. But the principle of this tax seems odd, especially in the cases I've outlined above.