TOKYO, Nov 30 (Reuters) - Japan's ruling Liberal Democratic Party (LDP) lawmakers are considering the possibility of reducing tax exemption on mortgages through the tax-code revision for the next fiscal year starting April 2022, a senior party official said on Tuesday.
Under the current mortgages tax break, adopted to cushion the pain of the Oct. 2019 sales tax hike, 1% of outstanding housing loans at the end of each year are exempted from taxation for a period of up to 10 years.
Mortgages tax breaks are one of main items for debates at the year-end tax-code revision to be compiled by the ruling coalition and the government, also featuring steps to cope with COVID-19 pains, such as tax breaks to encourage wage hikes.
Lawmakers are looking into the possibility of reducing the 1% tax exemption on mortgages to 0.7%, given that the amount of tax exemptions outweighs interest rates home-buyers pay on such loans.
"Many people said we have no choice but lower the 1% exemption rate, but that the 10-year period must be extended if the rate is brought down," LDP tax panel chief Yoichi Miyazawa told reporters after a panel meeting on Tuesday.
"We cannot afford to give a boost to households forever though." (Reporting by Tetsushi Kajimoto, Editing by Louise Heavens)