(3) Preparing the environment for a housing market in which diverse housing needs are properly fulfilled

### a. Preparing a market that facilitates the smooth trading of existing houses

Based on the "Used Housing/Renovation Total Plan" (March 2012) and the "Research Report on the Distribution Promotion/Utilization of Used Housing" (June 2013), efforts of (a) and (b) were promoted to set up a market that facilitates the use of existing housing.

In addition to improving the building evaluation technique, in order to establish said improvements in the existing housing market and the home financing market, the “Used Housings Market Activation Roundtable” was held from September 2013 as a means for the private businesses and financial institutions involved in the existing housing distribution to exchange opinions. In March 2015 the results from these discussions were summarized in the “Used Housings Market Activation Roundtable Report”.

Also, in the 2014 Tax Reform, in addition to making special provisions for the registration and licensing tax on acquiring existing houses that require a specific level of quality improvement, they have also decided that if an existing house is to have earthquake-resistance construction work done to it after acquisition, that it would be subject to mortgage tax breaks and other special provisions. Also, in the 2014 revision to the taxation system, a preferential measure for the registration license tax related to housing purchases in the buyback-resale business was created as a potential catalyst for expanding the existing housing/renovation market. Further, in the 2015 revision to the taxation system, a new measure was created to reduce the real estate acquisition tax that is imposed on the buyback-resale businesses.

## (a) Preparing the market environment in which consumers can remodel their homes without worry

Consumers planning to remodel their homes are concerned about how much the remodeling will cost them and how to select the right contractors. Reassuring worried consumers is essential to expanding the home remodeling market.

Efforts currently taken in this regard include the Check Quoted Remodeling Costs for Free service available from the Housing Telephone Consultation Desk at the Center for Housing Renovation and Dispute Settlement Support, in which consumers can receive consultation on specific quotations, and Free Expert Consultation Programs at local bar associations. In FY2014, there were 9,305 telephone inquiries regarding remodeling, 808 calls for checking quoted remodeling costs, and 884 calls for expert consultation regarding remodeling.

In FY2014, there were 2,493 subscriptions to the Remodeling Defect Liability Insurance Program, an insurance package that combines an inspection on remodeling works in progress with warranties against possible defects in the works, and subscriptions to the large-scale repair work liability insurance program for large-scale apartment building repairs were filed for 618 apartments.

Contractors seeking to be insured are registered with the Housing Defect Liability Insurance Corporation, subject to their possession of a construction business license, proven performance, etc. The Program allows consumers to browse through a list of registered contractors at an Association of Housing Warranty Insurance website as a helpful tool in choosing contractors.

Further, under the “Housing Renovation Business Organization Registration System”, we are working on building an environment where there is a healthy development of the housing renovation business and consumers renovate their homes with confidence, by having housing renovation business operators that meet certain standards registered to ensure that the work of housing renovation businesses are properly managed and information can be provided to the consumers.

## (b) Developing a market environment in which consumers can purchase existing houses without worry

Consumers who consider the purchase of existing housing may worry about the quality and performance of housing. Therefore, to expand the existing housing distribution market, it is necessary to build an environment where consumers can purchase an existing house without worry.

In order to do this, we are promoting the popularization of appropriate inspections based on the “Existing Housing Inspection Guidelines” (established in June 2013), which are guidelines pertaining to the inspection of current state of housing, so that consumers can get a grasp on the condition of the existing housing.

In terms of the Existing Housing Sale Warranty Insurance System, an insurance package that covers both inspections and warranty to defects, there is a growing variation in insurance products—such as the new insurance product developed in FY2013 which has a shorter coverage period but is relatively inexpensive—which has resulted in an increase in the number of subscriptions, from 4,072 in FY2013 to 8,261 in FY2014.