Selling an inherited house. This is the order.

The order

First: inheritance registration (compulsory since 2024)

Since April 2024, inheritance registration has been compulsory. You must register within three years of learning that you inherited the property. Miss that without good reason, and you can face a fine of up to ¥100,000. This applies to houses already inherited but never registered, too. Registration is required to sell, so either way this is the first step. If the division of the estate isn't settled, filing an “heir notification registration” for now is one way to meet the obligation.

The basics of tax on a sale

Tax on the profit from a sale (capital gains) runs at about 20% (20.315%) if you've held the property over five years, or about 39% (39.63%) if five years or less. An inherited house carries over the parent's holding period and acquisition cost (what they paid for it), so a family home is usually on the “over five years, about 20%” side. The problem is the acquisition cost — plenty of houses were bought decades ago for a price nobody can recall. In that case, 5% of the sale price is treated as the acquisition cost, which means tax falls on nearly the whole sale price. This is where the following deduction comes in.

• Long-term (over 5 years, counting the parent's ownership)20.315% tax
• Short-term (owned 5 years or less)39.63% tax
• If the acquisition cost is unknown (deemed cost)5% of the sale price

Two main deductions — but you choose one

If no inheritance tax was due — the majority of Toyama family homes — start with the ¥30 million deduction.

One is the ¥30 million special deduction for a vacant house. Where a parent lived alone in a family home built before May 1981, and other conditions apply, it lets you deduct up to ¥30 million from the profit on the sale, and for a family home in a rural area this often brings the tax down to zero. The other is the “acquisition cost addition” special provision, which lets part of the inheritance tax you paid be added to the “acquisition price” for the calculation. It's available to anyone who paid inheritance tax. Sell within three years of the inheritance tax filing deadline (within 3 years and 10 months of the death), and part of the inheritance tax paid can be added to the acquisition price. The two can't be combined on the same property — you choose one.

Deadlines: work back and there is less time than you think

• The ¥30 million deduction (a special rule that lets you subtract up to ¥30 million from the profit on a sale to reduce tax) requires the sale to be made by December 31 of the year in which three years have passed since the inheritance began
• The scheme itself ends on 31 December 2027; later sales do not qualify under current rules
• The acquisition-cost addition requires a sale within three years and ten months of the death
• Obtaining the municipal certificate and preparing the tax return take time too
• If it is left and designated a poorly managed or hazardous vacant house, the residential land tax relief (up to one-sixth) can be lost (A notice from the city)

Every year we see people who put it off until after the 49th day, then the first anniversary, and miss the deadline. You don't have to decide yet whether to sell — but find out early what the house is worth and whether the deduction applies.

Don't clear out or demolish first

The most common loss with an inherited house is moving straight to “let's just clear it out, demolish it, and then sell,” without thinking. Demolition in Toyama typically runs ¥1.5–3 million or more. And once the lot is cleared, the residential land exception for property tax stops applying from the following year. A buyer like us takes the house as it is, contents included, so no clearing out and no demolition is needed. Since 2024, the ¥30 million deduction can also apply when the buyer demolishes it after handover. The order is always: appraisal first, decide afterwards.

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