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Furusato Nozei (ふるさと納税)

Furusato Nozei, or the home-town tax program, offers residents an opportunity to send a portion of their residence tax to the "hometown" of their choice, generally in exchange for a gift worth approximately 30% of the donation amount. The cost to do furusato-nozei is ¥2000; the rest should return on your tax return.

What is the cost?​

The cost to use the furusato-nozei programme is ¥2000; the rest of the donations will return on your income and residence tax returns, assuming you do not exceed your limits.

What are the limits?​

  • Estimate your own taxable income.

  • If you do one-stop or your taxable income is less than 1.95 million yen, any of the regular FN donation limit calculation sites -- such as this one or the more advanced, but accurate one -- should be fine. Otherwise, use this tool to calculate your FN donation limit accurately.

  • If you have a residential mortgage tax credit and don’t do one-stop, avoid the regular calculation sites unless your taxable income is at least 10x larger than your tax credit (e.g., if you are eligible for a 200,000 yen credit, your taxable income should be at least 2,000,000 yen).

For a very nice post about FN limits and their interaction with how much you can donate and get back, check out our Guide to Furusato Nozei Donation Limits.

Please note also that there is an annual exemption to "temporary income" of ¥500,000, and that Furusato Nozei gifts count as "temporary income". This means, using the 30% guideline for the value of gifts to donations, if you donate more than ¥1,666,667, or you have other "temporary income" (lottery wins, insurance payouts, etc), you will be taxed on that income.

So, what if I do exceed my limits?​

You are essentially gifting money to the municipality as charity (although you will get whatever gift they send you). WE DO NOT RECOMMEND EXCEEDING YOUR LIMITS

Do I have residence tax this year?​

Residence tax for year n is determined by (a) your income in year n (b) on your residency on Jan 1 in year n + 1. This is why in people's first year in Japan, they pay no residence tax because their income in year n - 1 is zero. If you are leaving before Dec 31st, your residence tax for 2021 will be zero, because you are not a resident on Jan 1st 2022, and you should not use Furusato-Nozei.

What is One-Stop?​

If you gift 5 or fewer municipalities, and you are not required to file a tax return (because the basic YETA covers you / you do not have special circumstances), you can elect to do the "onestop" system, which allows you to avoid having to file a tax return.

You will need to:

  • Ask for one-stop at the time you make your donation(s)
  • Mail the one-stop application to the municipality before January 10th of the following year for each donation

If you do not use onestop, you must save the receipts that are sent to you for tax filing time, or file using e-tax where they are not required.

How do I file my tax return next year with Furusato Nozei?​

If you do not use onestop, you should save the hanko'd receipts that the municipalities send to you for tax filing time.

New in 2021, most Furusato-Nozei shopping sites will send you a single consolidated reporting statement for your taxes. See this post for more information.

What are some sites I can use?​

There are myriad sites which offer easy furusato-nozei options; the most popular are:

How can I check my donations have actually decreased my tax ?​

Only around June of the following year, now in possession of a freshly-issued Resident tax calculation slip, you can finally reconcile your donation with actual deductions.

The deduction mechanism is explained in detail in the 'How is my donation refunded to me?' section of the Furusato Limit thread.

Amount donated should be equal to : (1) 2000 cost for using the Furusato system

  • (2) deduction on income tax equal to amount donated (noted on line 寄付金控除) multiplied by marginal income tax rate
  • (3) remaining amount should appear in the detail section located at the bottom of the resident tax slip, sometimes slip between local and prefectural deductions

Reconciliation example

Furusato-Nozei and Point Hacking​

Rakuten often also does super sale events; if you prefer to use them for your platform, you can get a significant number of points for your Furusato Nozei purchases, within their limits.

Recent Updates

2023​

There is a new searchable website version of the Wiki! Please do feel free to use it as an alternative to Reddit's own lackluster UI.

Some municipalities were spending more than 50% of the donation amount on return gift items, and have been warned by the Ministry of Internal Affairs and Communications that the total cost of providing these gifts, including shipping, marketing, portal-site fees, etc cannot exceed 50% of the donated amount. This will lead to lucrative cash-like point-back campaigns yoinked and some gifts being pulled from the market or having their donation costs rise.

Previous Megathreads: