c. Making housing available to fill varied dwelling needs and closing gaps between supply and demand for housing

## (a) Home financing

The Japan Housing Finance Agency offers securitization support services to support the availability of long-term, relatively low fixed-rate home loans from private banking institutions. Its operations include Flat 35 (buy-out type) that consolidates the securitization of housing loan receivables of private banking institutions and Flat 35 (guaranteed type) which supports the private banking institutions themselves becoming the originator $ \textsuperscript{Note 1} $ to handle the securitization. The performance result for Flat 35 (buy-out type) up to the end of March 2015 was 944,489 cases of buy-out applications and 665,259 cases of successful buy-outs, with 329 financial institutions participating. The performance result for Flat 35 (guaranteed type) up to the end of March 2015 was 20,148 applications for insurance coverage and 12,416 cases receiving insurance coverage, with 5 financial institutions participating.

For houses that are entitled to receiving securitization support, property inspections are carried out against a defined set of technical requirements, such as durability, to assure their quality. In addition, the framework of the securitization support service has been leveraged to launch Flat 35S, which reduces the interest rate of the loan on the acquisition of houses that meet any one of the performance requirements: earthquake-resistance, energy-saving performance, barrier-free readiness, and durability/modifiability, for the first years of its repayment (for the first 10 years for long-lasting quality housing).

The Agency also provides services in those areas that are politically significant but that cannot be easily addressed by private banking institutions, such as financing housing designed for disaster recovery or elderly rental housing with supportive services.

## (b) Housing Tax System

With the housing acquisition environment growing worse, and in order to prop up the existing housing construction, major improvements were made in the 2015 taxation reforms with regard to dealing with the recoil reduction from the 10% increase of the consumption tax rate planned for April 2017, such as extending the tax-free measures for gift tax in the case of gifts from lineal ascendants for housing purchase funds to the end of June 2019, and raising the maximum tax-free limit to JPY300 million. Also, a maximum housing benefit of JPY300,000 cash benefit had been created, along with the expanding of the home buyer's tax break in accordance with the 8% increase of consumption tax rate in April 2014. This applicable cut-off date has now been extended 1.5 years from the year-end of 2017 to the end of June 2019 to match the 1.5 year postponement of the 10% increase in the consumption tax rate.

It is hoped that with these measures in place, the housing acquisition of the younger generation will be promoted and the predictability will get higher for those who are considering housing acquisitions, and that these factors will contribute to the stabilization of the housing market.

## (c) Preparing the rental housing market

To improve the stocks of owner-occupied houses, such as stand-alone houses and condominium apartments, by making them available for rent in the rental housing market, the MLIT is working to prepare the rental housing market by disseminating the fixed-term housing rental system, developing standard contracts for subleasing Note 2 original rental housing, and developing DIY type lease Notes 3 & 4 guideline.

## (d) Improving the residential environment by promoting measures against vacant houses

To ameliorate the residential environment which can deteriorate due to an accumulation of vacant houses that are not