3 Indices

At this time, we`d like to touch on the differences among the 3 main market value indices publishing an indication of land values in Japan, which are Official Land Price, Roadside Land Price, and Standard Land Price. They are of frequently asked questions from the foreign investors when their initiating purchasing process of properties in Japan. Each of them looks similar as they indicates land values, but the roles and the uses are different as below.

Official Land Price is published by Land Appraisal Committee of Ministry of Land, Infrastructure, Transport and Tourism, which is a land value index as of January 1^st every year. It is referred to when calculating land values of official and private transactions.

Roadside Land Price(Road Rating) is published in July every year. It is also appraised on the date of Jan. 1^st, but it takes some time to get the appraisal process completed, which leads to be published in July. It is referred to at inheritance tax & gift tax calculations.

Standard Land Price is published as of July 1 every year. It is quite similar to that of Official Land, but its publication is a half year later than Official Land Price and it includes forest/wood lands which is not at the Official Land Price.

＊Image of Land Market Value Publication (Source : from Ministry of Land, Infrastructure, Transport and Tourism)

Official Land Price（Implemented by the Land Appraisal Committee under Ministry of Land, Infrastructure and Transport as of January 1st every year）

It is based on Public Notice of Land Prices Act, published every year by Land Appraisal Committee of Ministry of Land, Infrastructure, Transport and Tourism. Its research and appraisal has been conducted every year from the year 1971. The lands for the process are principally located in planning zones of City Planning Law. Other areas than the planning zones can be added for the process if those areas are highly anticipated for land transactions based the acts of the Ministry.

Its main purpose to publish is to set up a market value index for ordinary land transactions and to publish an indication of adequate land values to the markets. Its categories of the lands are residential, commercial, anticipated residential, semi-industrial, industrial and control area in residential.

You can have more information on Official Land Price at the link as below.

http://tochi.mlit.go.jp/english/land-prices

Roadside Land Prices : Road Rating（Implemented by National Tax Agency as of the first of July）

There are 2 types of indicating prices at roadside lands in which one is a Roadside Land Prices for Inheritance Tax」 and the other is a Roadside Land Prices for Fixed Asset Tax. And generally the roadside land prices for inheritance tax is used for the publication.

Roadside Land Price is an appraisal value of land facing a thoroughfare and an indication of land value for accounting inheritance tax and gift tax, which is set around 80% of official land price.

The research and appraisal is conducted based on inheritance tax law, is determined by regional taxation bureau which is one of the substructures in National Tax Agency. It is calculated by distance of a certain road while the official land price is a value to a land itself. There can be exceptional cases to be revised upto the conditions of lands concerned, but principally each prices of land per square meter along selected streets are same.

However, in a road with a long distance in metropolitan cities there can have different sections in value on a road. With the number of the lands for appraisal more than 10 times that of official lands/standard lands, its publication is on the 1^st of July while the date to set for appraisal is on the 1^st of January.

*Image of Road Rating (In Ginza 2 Chome Chuo-ku Tokyo)

You can have more information on Roadside Land Prices at the link as below.

http://www.rosenka.nta.go.jp/

Standard Land Prices : Publication of Market Values of Standard Sites (Implemented by prefectural Government as of July 1st every year)

It`s been published since 1975 around on the 20^th of September every year. It is quite similar to Official Land Prices in terms of the characteristics, purpose, and the method of appraisal, however, the main differences are the timing of appraisal which is processed on the 1^st of July(on the 1^st of Jan. for Official Land Prices), its applicable law which is National Land Utilization Law, and the appraisal entities which are Metropolis&Districts. And the appraisal lands for the standard land prices includes residential, commercial, industrial and forest lands which are not in the city planning areas while the lands for the official land prices are mainly in the city planning areas. Given that some lands are overlapped by those of official land prices, we can have an opportunity to check the land values change between the two appraisals, one for the official land and the other for standard land prices.