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Saturday, April 2, 2016

Three Generation Home Reno Gets Tax Deduction

Regardless of the political regime in power, the little guy always gets squeezed.

In Japan, however, this time the little guy could get a tax break. If he's rich enough.

A few days ago, (HERE) I wrote about how Japan's senior citizens were more and more likely to do a petty crime in order to get jail time in a nice comfy room, be provided with three square meals a day, free medication and operations, and of course all the free weights they can pump in order to get revenge on The Man when they get out.

Aside from that last point, part of the problem revolves around the fact that Japan's elderly are no longer being taken in and looked after by family members—IE the eldest son and his family.

That may be because the eldest son, like many Japanese are opting to do, is not getting married, and even if they do, aren't procreating. It means they can live in smaller housing, pay less rent—and we've all heard the horror stories about Japan's outrageously high rental and owned properties.

As an aside, my piece of crap house in Toronto was built in 1945. When we moved in, back in 1973, it was a house with small rooms: with two upstairs bedrooms and bathroom, a living room-dining room-kitchen and den on the main floor, and an unfinished basement where the furnace room and washer dryer, and freezer resided. The backyard, however, was something like 120-feet x 45-feet, with lots of fruit-bearing trees, bushes and zero fencing.

Over the next few years, my father put up fences, cut down a 60-foot tall Weeping Willow Tree whose roots were attempting to push into the basement in search of free water; finished the basement, raising the floor, dry-walling everything and adding a second bathroom, and yearly rototillered a large area to grow vegetables. While a pear tree remains, I've had to cut down an old apple and peach tree, and two plum trees that developed some weird disease.

In the late 1970s, my grandfather traveled from India to live with us, enjoying his remaining years in a comfortable surrounding until he passed in 1991 while I was in Japan.

Three generations under one roof. (I know, some of you may have four or even five generations.)

Anyhow, the government of Japan is looking to 'reward' Japanese households that have three generations under one roof IF renovations are undertaken to make the place more accommodating.

I know, why else would one do renovations?

The three-generation home (sansedai jutaku) has long been a part of traditional Japanese society, but is one, in recent years, found to have cracks in the foundation.

In a great plan that is all the brainchild of the ruling Liberal Democratic Party, starting now, April of 2016, Japanese families WILL (not can) receive a tax break when a home remodeling is done for the benefit of the three generations of family residing there.

That means, Grandparent(s), parent(s), child(ren).

Homeowners will receive a tax break equal to 10 percent of the renovation, up to a maximum of ¥250,000 (~US $2,239).

As well, bank loans for a three-generation home renovation will also get the homeowner another taxable deduction.

Not yet instituted, but it is being considered, are subsidies that may be available for renovations that include approved energy conservation system/measures (new water heater/furnace/roof/windows, for example), and for barrier-free home design implementations (not-so narrow stairs, handrails, easy to reach light switches and shelves, non-obtrusive thresholds - as a gaijin (foreigner), how often did you smack your head on a low door, or trip on a threshold?).

If I was doing a renovation, and could afford to wait, I might wait until these subsidies were included to sweeten the deal. Every little bit helps when making a safe home for the outlaws, er, in-laws.

Let's give credit, where credit is due. I've not been a fan of Japan Prime Minister Abe Shinzo (surname first) and his hawkish behavior, but the three generation home renovation tax break is all his, and it is a very smart plan.

Yeah, yeah, Japanese opposition can still complain that these tax breaks and/or subsidies do nothing to alleviate the declining Japanese birthrate, but with an aging population, this is a family-friendly consideration for those that opt to look after elderly family members, rather than leaving them to more or less fend for themselves.

Again… I realize that not every one, regardless of Japanese cultural tradition, can afford—or has the room—to have their parents move in. Not every family owns property. Many rent. Good luck doing a renovation on a rental unit - it ain't happening.

Abe has become quite forceful in his attempts to change the way modern Japanese society thinks. Ex-cabinet ministers who refused to walk the party line have been fired. In many cases where scandal was not the issue, those ex-members felt that tax breaks for those who could AFFORD something like a renovation was not fair to families in a lower income situation.

I can dig that complaint, but that's my problem and I certainly don't begrudge those who can afford a home renovation (and paying more taxes) to earn a tax break for themselves… and all the while helping to look after seniors.

Like anywhere, having a grandparent nearby can also mean free baby-sitting… plus a portion of their monthly government senior citizen cheques/checks (if offered) can provide a bit of financial relief for the family that has included them into their home.

Now… as I mentioned, I always felt Prime Minister Abe to be hawkish. He has always been a keen proponent of taking Japan back a small step to when its traditional ways helped make it great.

If I may, Japan truly became a world power when its ability to create affordable vehicles, miniaturized and affordable electronics, and of course its considerable contribution to the world of robots and robotics, certainly a mainstay in most advanced and successful manufacturing companies around the world. That helped make it great. People and science and technological advancements.

And while I am sure that Abe would also like to go back to a time when the world (or Asia, at least) feared and respected Japan (1900s-1945), he is correct about the traditional role of the Japanese family.

I'm not a big fan of having every surviving family member around me all the time, unless that is something they want and/or need. But I'm not Japanese.

While I can understand the need to have some freedom from being under the iron claw of one's parents, I also understand the loss of traditional family values.

I'm not saying the men all need to wear a suit and tie from morning through bed, have to smoke and have a martini made by the wife who's only job is to shut her mouth, cook dinner, look pretty and be a homemaker.

I know, some of that sounds appealing to the chauvinistic male, and I hope Abe isn't suggesting Japan moves back to ideals that are too old-fashioned, but he does feel that respect for the elderly is important.

However, despite the niceness of this tax break, Abe wants to continue his push for family values:
  • Married couples should have the same family name - preferable the male, but Abe is also aware of adult adoption and is good with that;
  • Koseki family registry system, that encourages paternalism. That means a return to a male-dominated society… and if you foreign visitors believe Japan to be that way now, the proposed paternalistic view will take Japanese society back generations. Oink-oink.
For now, the three-generation home renovation tax break is a good, non-sexist idea.

Yes, it rewards the HAVES versus the HAVE-NOTS, but people need to realize that no government initiative anywhere will positively affect everyone in every social, sexual or financial clime.

Andrew Joseph

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