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2026-09-09

Property title and the home loan tax credit ― shares in a home a couple buys together, pair loans, and the gift tax trap

When you buy a home, whose name it goes in changes the home loan tax credit and gift tax. The rule is to match the shares to \"the proportion of money each person put in\"; if they do not match, gift tax can apply. The credit is 0.7% of the year-end loan balance for up to 13 years, and each spouse can receive it according to their share and borrowing, with differences between pair loans, joint debt and joint guarantees. This article also covers why there is no credit for an inherited home, title problems on divorce, and the tax-free allowance for help with funds from parents.

About this translation ― This page is an English translation of an article originally written in Japanese by KuraLab's operator, a licensed real-estate transaction specialist (宅地建物取引士) and administrative scrivener (行政書士) in Japan. The Japanese original is the authoritative text; where the two differ, the Japanese version prevails. The article explains Japanese law and procedure in general terms as of the date shown. It is not legal, tax or immigration advice for your situation ― please confirm with a licensed professional in Japan. Japanese terms are kept in parentheses so you can search for them. Read the Japanese original

A month after handover, the wife's mother phoned. "I hear there's gift tax on the 10,000,000 yen I gave my daughter." It was a 40,000,000 yen house the couple had bought together. The husband put in 5,000,000 yen of his own money and a 25,000,000 yen loan, and the wife 10,000,000 yen of her own money, which had come from her mother. The title, on the estate agent's suggestion, had gone "in the husband's sole name." The wife's 10,000,000 yen was a gift to the husband, and the mother's 10,000,000 yen was a gift to the daughter. In two stages, it had become subject to gift tax. This article is about what happened from that phone call until the title was put right.

When buying a home, most people look at the price and the interest rate, and put the title "in the husband's name, just because." But the title (the shares) decides the amount of the home loan tax credit and whether gift tax applies. Some families only notice the problem when, in an inheritance consultation, it comes out that "the house is in the husband's name, but the wife's parents paid the deposit." Here is what you should decide when you buy.

The rule is "match the shares to the proportion of money each person put in." If a 40,000,000 yen home is bought with the husband putting in 5,000,000 yen of his own money and a 25,000,000 yen loan and the wife 10,000,000 yen of her own money, that is 30,000,000 yen from the husband and 10,000,000 yen from the wife, so the shares are three quarters for the husband and one quarter for the wife. Put it "in the husband's sole name," and the 10,000,000 yen the wife paid is treated as a gift from wife to husband, subject to the gift tax described in the article on gifts (tax on 8,900,000 yen after the 1,100,000 yen basic deduction). Conversely, if the husband pays everything and the title is half each, the same thing happens. Title is decided not by feelings but by where the money came from.

An example of shares in a 40,000,000 yen home (husband: own funds 5,000,000 yen + loan 25,000,000 yen; wife: own funds 10,000,000 yen). The shares are three quarters for the husband and one quarter for the wife. If it is put in the husband's sole name, the wife's 10,000,000 yen is treated as a gift.

The home loan tax credit (住宅ローン控除) is a system under which someone who acquires a home to live in with a loan can deduct 0.7% of the year-end loan balance from income tax (and, if it cannot all be used, part of residence tax). The period is 13 years for a new home (10 years for second-hand), and the cap on the eligible balance is set by the home's performance; from 2024, new homes that do not meet energy-saving standards are in principle excluded. Certified housing, described in the article on long-life quality housing (長期優良住宅), has a higher cap. Under the law as of 1 April 2026, it covers moving in by the end of December 2030 (Reiwa 12), and the cap on the balance changes in steps according to the year of moving in and the home's performance, so check the requirements at the time of purchase.

There are three ways for a couple to borrow, and the credit works differently for each. With a pair loan (ペアローン), husband and wife each take out a separate loan and act as joint guarantor for each other. Each can receive the credit on their own loan balance. With joint debt (連帯債務), the two borrow one loan together, and each receives the credit according to their share of the burden (for example a married couple's joint debt under Flat 35). With a joint guarantee (連帯保証), one person borrows and the other is only a guarantor, and only the borrower can receive the credit. The joint guarantee form, "we borrowed adding the wife's income, but the title and the credit are the husband's alone," gives the wife no benefit from the credit even if she helps repay, and if she actually repays, it can become a gift issue. If two people are repaying, use a pair loan or joint debt, and split the shares too. That is the rule.

Three ways for a couple to borrow and the home loan tax credit. Pair loan: each takes out a separate loan and guarantees the other's; the husband and wife each receive the credit (on their own balance); shares divided by each person's burden. Joint debt: two people borrow one loan; the husband and wife each receive it (on their share of the burden); shares divided by share of the burden. Joint guarantee: one person borrows and the other is guarantor; only the borrower receives it; the share is the borrower's (if the guarantor repays, it becomes a gift issue).

A word too about help with funds from parents. When you receive money from parents or grandparents to acquire a home, there is the "gift tax exemption for funds for acquiring a home" (住宅取得等資金の贈与の非課税): no gift tax up to 10,000,000 yen for an energy-efficient or similar home and 5,000,000 yen for others (it is stated to cover gifts up to December 2026, and the deadline has been extended repeatedly). To use this exemption you must file a gift tax return, the money received must be used to acquire the home, and the corresponding share goes in the child's (the recipient's) name. If the parents' money goes into a share in the parents' name, that is the parents' share and not a gift, but that share will in future be part of the parents' estate.

There is no home loan tax credit for an inherited home. The credit requires that you "acquired it with a loan," and inheritance is not acquisition with a loan. If you take out a loan to renovate an inherited home, it may be eligible for the credit as "extension or renovation" under certain conditions. Living in an inherited family home, as in the article on vacant houses, differs from a new build or purchase on this point.

One more title problem, on divorce. A common pattern is for the wife to go on living after divorce in a home with a loan in the husband's name, but the name on a loan cannot be changed without the lender's consent, and if the husband stops repaying, the home goes to auction. Even if the title to the home is moved to the wife in the division of property, the loan remains the husband's. To avoid this instability, the wife either refinances in her own name or the home is sold and the proceeds settled. Many people say at divorce, "we should have taken a pair loan when we bought," but a pair loan means sorting out two loans at divorce, which is hard work in its own way. Title becomes a problem both when you buy and when you part.

Sorting it out in the case. First, the 10,000,000 yen from the mother to her daughter. This was eligible for the gift tax exemption for funds for acquiring a home, and since this house was a new build meeting energy-saving standards, it was tax-free up to 10,000,000 yen. But a gift tax return was required, by 15 March of the following year. There was still time. Next, the 10,000,000 yen from the daughter to her husband. This was outside the exemption; gift tax would apply to 8,900,000 yen after the 1,100,000 yen basic deduction, and the tax would be about 2,310,000 yen (gifts between spouses use the general rate: 8,900,000 yen × 40% − 1,250,000 yen). This was the problem.

The fix is to match the title to the proportion of money put in. 30,000,000 yen from the husband and 10,000,000 yen from the wife, so three quarters for the husband and one quarter for the wife. But since registration in the husband's sole name had already been completed, the shares were corrected by an ownership correction registration (所有権更正登記) on the ground of "error" (錯誤). The registration and licence tax was 1,000 yen per property, 2,000 yen for land and building. The judicial scrivener's fee was about 40,000 yen. Because the lender's mortgage was registered, the correction registration required the bank's written consent, which took three weeks. The correction registration was completed three months after handover. Because the title was corrected before the gift tax filing deadline, there was treated as having been no gift from the daughter to her husband, and the 2,310,000 yen never arose.

The home loan tax credit was sorted out in the same way. The loan was 25,000,000 yen in the husband's sole name, and the wife had not borrowed. The credit was the husband's alone, 0.7% of the year-end balance, about 170,000 yen in the first year. The wife's one-quarter share was the part bought with her own funds, so it is not eligible for the credit. If the wife had also been working and had borrowed 5,000,000 yen as a pair loan, she would also have had a credit on paper, but in this couple the wife was on childcare leave with no income and could not use a credit, so this form was the right one. The four steps I describe in the main text, deciding title and loan form by looking at both gift tax and the credit, were in this home followed after the purchase, in reverse order.

The steps for deciding title, in summary. One: make a table of who puts in how much in own funds and loans. Two: decide the shares by that proportion. Three: check that the loan form (sole, pair, joint debt, joint guarantee) is consistent with the shares. Four: if there are funds from parents, file for the exemption and reflect it in the shares. Finish these four before the sale contract, and there will be no gift tax problem and no credit missed. The shares in Section A (甲区), described in the article on reading the certificate of registered matters, are the result of this table.

The wife's mother's call came three months before 2,310,000 yen of gift tax would have arisen. With 2,000 yen for the correction registration and 40,000 yen for the judicial scrivener, the title was put right to match the money put in. In the main text I wrote, "title is decided not by feelings but by where the money came from." This home's estate agent suggested "in your husband's name," and the couple went along with it. Had they made a table of where the money came from, the figure of one quarter would have come out before the sale contract.

Written by: 長澤 湊（licensed real-estate transaction specialist, administrative scrivener, assistant surveyor）　Content checked on: 2026-10-24

This article is a general explanation of Japanese rules and procedures, not advice on an individual case. Figures and rules are as of the date shown. For your own situation, consult a lawyer, judicial scrivener, tax accountant or administrative scrivener in Japan.

Official sources

The rules and figures in this article can be checked against the following official pages (in Japanese).

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