Former Tax Official: Single-Room Investments Only Cut Taxes for High Earners

A former Japanese tax bureau official asserts that single-room apartment investments only provide tax benefits for individuals earning over 22 million yen annually, warning that lower-income investors face net losses. The official stated that depreciation-based tax refunds merely defer taxes, which are later collected upon sale. For those earning 4-5 million yen, the deferred tax rate is lower than the eventual capital gains tax, making the investment unprofitable. Industry sales tactics highlighting tax refunds often conceal larger actual losses, such as a 240,000 yen annual deficit offset by only a 310,000 yen refund. Property values also decline, leading experts to label this practice a business exploiting uninformed investors.