"Inheritance AI" Adds Simulation Feature for Special Provisions on Small-Scale Residential Land: AI Determines Cases Where Inheritance Tax Can Be Reduced by Up to 80%

Mycat Inc. (Headquarters: Meguro-ku, Tokyo) is pleased to announce the addition of a simulation feature for the special provisions on small-scale residential land to its AI inheritance tax simulator service, "Inheritance AI" (https://souzoku-ai.xyz).

What are the Special Provisions for Small-Scale Residential Land?

The special provisions for small-scale residential land allow for an 80% reduction in the assessed value of up to 330 square meters of land that was used as the decedent's residence (specified residential land, etc.), provided certain requirements are met (Article 69-4 of the Act on Special Measures Concerning Taxation).

For example, if this provision is applied to a residential plot with an assessed value of 50 million yen, the value for inheritance tax calculation becomes 10 million yen. In cases where real estate accounts for a large portion of the inheritance, the applicability of this provision significantly impacts the tax amount.

Requirements for Application and Complexity of Determination

The requirements for applying the special provisions for small-scale residential land are complex.

If acquired by a spouse: The spouse is eligible for the special provision unconditionally.

If acquired by a cohabiting relative: It applies if a relative who was living with the decedent at the time of the start of the inheritance acquires the property and continues to reside in and own it until the tax filing deadline.

If acquired by a non-cohabiting relative (the so-called "homeless child" provision): Only when there is no spouse or cohabiting heir, a non-cohabiting relative who meets certain requirements may be eligible. In this case, multiple requirements must be met, such as not having lived in a house owned by themselves or their spouse within three years prior to the start of the inheritance.

Overview of the New Feature

The newly added simulation feature calculates the eligibility for the special provision and the reduced assessed value by inputting the following information:

Input Items

• Land area and assessed value
• Relationship to the decedent (spouse, child, grandchild, etc.)
• Living status of the heir (cohabiting/non-cohabiting)
• If non-cohabiting: Living status over the past 3 years
• Planned use after acquisition (continued residence, sale, etc.)

Output Content

• Determination of eligibility for the special provision
• Reduced assessed value if applicable
• Estimated inheritance tax amount after applying the provision
• Details on the fulfillment of application requirements

According to National Tax Agency statistics, the inheritance tax taxation rate is at a record high of 9.9%, with the taxable value reaching 21.6 trillion yen (Source: National Tax Agency, 2023 Inheritance Tax Filing Results). We recommend checking the applicability of these special provisions in advance to prepare for inheritances involving real estate.

※ This service does not constitute tax consultation under the Certified Public Tax Accountant Act. Please consult a tax accountant or other professional regarding specific applications of special provisions or filing procedures.

■ Company Overview
Company Name: Mycat Inc.
Established: February 5, 2025
Address: 2-7-22 Mita, Meguro-ku, Tokyo
Business Description: Planning, development, and operation of AI-based services for small and medium-sized enterprises and individuals
Corporate Website: https://mycat.business
Contact: [email protected]