"Souzoku AI" Adds Simulation Feature for Special Provisions for 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 regarding the special provisions for small-scale residential land to its AI inheritance tax simulator service, "Souzoku AI" (https://souzoku-ai.xyz).

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

The special provisions for small-scale residential land is a system that allows for an 80% reduction in the assessed value of up to 330 square meters of land where the decedent resided (specified residential land, etc.), provided certain requirements are met (Article 69-4 of the Act on Special Measures Concerning Taxation).

For example, if these provisions are 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 inherited assets, the eligibility for 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 provisions 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 land and continues to reside on and own it until the tax filing deadline.

If acquired by a non-cohabiting relative (the so-called "homeless child" provision): Only if 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 provisions and the reduced assessed value by entering 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 provisions
• Reduced assessed value if applicable
• Estimated inheritance tax amount after applying the provisions
• 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 these provisions or filing procedures.

■ Company Overview
Company Name: Mycat Inc.
Established: February 5, 2025
Location: 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: info@mycat.love