Future Prospects of the Inheritance Market and Business Opportunities Arising from Real Estate Inheritance
The Current State and Future Outlook of the Inheritance Market
As Japan’s population continues to age, terms like “inheritance” and “gifting” have become more prevalent. According to the National Tax Agency’s “Overview of Inheritance Tax Filings for FY2020,” the proportion of cases subject to inheritance tax reached a record high of 8.8% in 2020.
Trends in the Proportion of Cases Subject to Inheritance Tax
The trend indicates that the taxable amount of inheritance assets and taxes is also increasing, reaching a record high of 16.4 trillion yen in 2020.
Trends in the Taxable Value and Tax Amount of Inheritance Assets
An examination of the breakdown of inheritance assets reveals that land constituted the largest portion at 34.7%, followed by cash at 33.9% and securities at 14.8% in 2020. When combined, real estate-related assets, including land and buildings, account for 40% of the total inheritance assets.
Trends in the Proportion of Inheritance Asset Values
According to the Ministry of Internal Affairs and Communications’ “Population of the Elderly” (2021), the estimated population of people aged 65 and older reached a record high of 36.4 million as of September 15, 2021, accounting for 29.1% of the total population, the highest in the world. This proportion is expected to continue rising, reaching 35.3% by 2040.
Given Japan’s prolonged aging society and the current state of the inheritance market, the market is expected to continue expanding.
Challenges Faced by Heirs in Real Estate Inheritance and the Demand in the Inheritance Market
As previously mentioned, real estate, including land and buildings, makes up 40% of inheritance assets. In Japan’s aging society, the number of people inheriting real estate from deceased relatives is expected to increase.
Inheriting real estate can be complex, often leading to disputes among heirs. Common issues include:
? Selling only the inherited real estate
? Tax implications of selling inherited real estate
? Calculating taxes upon sale
? Procedures for renouncing inheritance
? Methods for dividing the estate, such as physical division, compensation, or conversion
Due to the diverse nature of these issues, there is significant demand for inheritance consulting services, including rights adjustments, asset reallocation, real estate valuation surveys, and pre-mortem planning.
For tax and legal firms, this presents substantial business opportunities. Firms should consider entering the real estate inheritance market to leverage these opportunities.
Expanding Business for Tax Firms: Tips and Strategies
To maintain a steady revenue stream, tax firms must adapt to changing client needs. With the number of small and medium-sized enterprises (SMEs), the main clients for tax firms, declining, it is crucial for firms to explore new avenues for stable profits. Detailed strategies on how to achieve this are available in our comprehensive guide on increasing tax firm revenue.
Conclusion
This article provides insights into:
? The current state and future outlook of the inheritance market
? Common challenges faced by heirs in real estate inheritance and the demand in the inheritance market
Japan’s long-term aging trend suggests that the inheritance market will continue to expand, offering new business opportunities. Real estate, which constitutes 40% of inheritance assets, is particularly significant. Demand for consulting services related to inheritance, sale, and utilization of real estate is expected to rise.
One effective tool for entering this consulting market is “TAS-MAP,” which offers high-precision real estate evaluations based on extensive data. TAS-MAP eliminates subjectivity, allowing anyone to use it without specialized knowledge. It can also be used for preparing client presentation materials, making it a valuable resource for professionals in the inheritance consulting business.