# Am I reading this wrong



## pasturesnew

Ok found a property , Im eligible to be part of the Company's rent program...
A little confused as not sure if Im paying less tax or simply paying a small percentage of the rent... 

Details as follows...



To ensure that you are eligible for concessionary treatment of accommodation under Japan tax laws and regulations. It is necessary for you to pay an after tax contribution towards the costs. The minimum contribution, or Legal rent, that you will be required to make is currently set at 6.5% of the actual rent. 



Appreciate someone elses take on this...


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## larabell

pasturesnew said:


> To ensure that you are eligible for concessionary treatment of accommodation under Japan tax laws and regulations. It is necessary for you to pay an after tax contribution towards the costs. The minimum contribution, or Legal rent, that you will be required to make is currently set at 6.5% of the actual rent.


It sounds to me like your employer will partially subsidize your rent. That creates a taxable event for you -- that is, you would ordinarily have to pay tax on the rent as if it were ordinary income. Apparently, either you or your employer can get a break on the tax if you pay a certain minimum percentage of the rent yourself.

There's nothing about this in the English tax guide that comes with my tax forms every year. That makes me think that maybe the tax benefit might be something your employer gets, not you. However, for the few years that my employer was paying my rent, an accounting firm did my taxes so I don't know for sure what percentage of my rent subsidy was taxed (and my company's policy was that I paid whatever I would have paid for a similar place in the US, which was much more than 6.5% of the actual rent).

It sounds like you're getting cheap rent but not free. My guess is that you'll be taxed on whatever the company pays toward the rent as if it were ordinary income. But you might want to ask your company's HR or Finance contact to be sure.


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## pasturesnew

larabell said:


> It sounds to me like your employer will partially subsidize your rent. That creates a taxable event for you -- that is, you would ordinarily have to pay tax on the rent as if it were ordinary income. Apparently, either you or your employer can get a break on the tax if you pay a certain minimum percentage of the rent yourself.
> 
> There's nothing about this in the English tax guide that comes with my tax forms every year. That makes me think that maybe the tax benefit might be something your employer gets, not you. However, for the few years that my employer was paying my rent, an accounting firm did my taxes so I don't know for sure what percentage of my rent subsidy was taxed (and my company's policy was that I paid whatever I would have paid for a similar place in the US, which was much more than 6.5% of the actual rent).
> 
> It sounds like you're getting cheap rent but not free. My guess is that you'll be taxed on whatever the company pays toward the rent as if it were ordinary income. But you might want to ask your company's HR or Finance contact to be sure.



Thanks for your reply, Ive since had a reply from HR. 

My Rent Program = Up to a max 35% of my gross monthly salary will be taxed at 6.5%, the wording certainly doesnt imply that and indeed the Employer made it sound a big deal , however when you crunch the numbers it doesnt seem so, still any saving is a good thing, right.... (it was all looking so good to start with), I guess thats with being a local hire which I understand is the norm these days - EXPAT long term are a rare breed..


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