Every time I furnish a new unit, I go through the same mental math: is this ordinary furniture purchase going to create a multi-year depreciation schedule, or can I just write the whole thing off this year? For a while I didn’t actually know the rule well enough to answer that quickly — I just handed the receipts to my accountant and hoped. Once I understood the ¥400,000 special measure properly, furnishing decisions got a lot easier to plan around.

If you’re a sole proprietor or small operator running a guesthouse in Japan, this rule is often an overlooked tax measure worth checking your receipts folder for.

TL;DR

  • 少額減価償却資産の特例 (the small-value depreciable asset special measure) lets eligible blue-return (青色申告) small business taxpayers/SMEs expense the full cost of a qualifying asset under ¥400,000 in the year it is put into business use, instead of depreciating it over several years.
  • The special measure is capped at ¥3,000,000 total per tax year/business year (prorated by month if the year is shorter than 12 months) — plenty of headroom for most single-property or small multi-property operators.
  • It builds on two lower tiers open to every filer: assets under ¥100,000 can be expensed immediately, and assets from ¥100,000 to under ¥200,000 can optionally be depreciated evenly over 3 years regardless of blue/white status. Only eligible blue-return SMEs get immediate expensing up to ¥400,000.
  • For a guesthouse, this typically covers beds, appliances, TVs, smart locks, and furniture bought as individual units — the exact things you’re buying when you open or refresh a property.
  • Keep proper books and a supporting receipt for the expense itself, and separately keep qualified invoices (or a permitted substitute) if you also need to claim the consumption tax input credit.

What Is the ¥400,000 Special Measure, and Why Does It Matter?

The 少額減価償却資産の特例 is a special measure that lets eligible small business taxpayers/SMEs filing blue returns deduct the entire cost of a qualifying asset in the year it is put into business use, rather than spreading the cost across that asset’s statutory useful life. Normally, an asset with a service life longer than one year and a meaningful price tag has to be depreciated — you deduct a slice of its cost each year for several years, per Japan’s fixed depreciation tables.

That’s fine for a building. It’s annoying for a guesthouse. When you’re furnishing or refreshing a property, you’re buying a dozen things at once — beds, a washer-dryer, a TV, a smart lock, dining furniture — and normally each one over ¥100,000 would need its own multi-year depreciation schedule tracked separately. The special measure collapses that into a single deduction, taken in the year the asset goes into business use, which matters most in the year you’re spending the most: opening a new unit or doing a major refresh.

How Does It Differ From the Standard ¥100,000 Rule?

There are effectively four tiers, and mixing them up is the most common mistake I see. Anything under ¥100,000 can be expensed immediately by any filer, blue or white return — no special application needed. Between ¥100,000 and under ¥200,000, any filer can optionally spread the cost evenly over 3 years using aggregate (lump-sum) depreciation, regardless of blue/white status. Between ¥100,000 and under ¥400,000, eligible blue-return SMEs can instead expense the full amount immediately under this special measure, capped at ¥3,000,000 in total qualifying purchases per tax year/business year (prorated by month if the year is shorter than 12 months). At ¥400,000 or more, assets generally follow normal depreciation over the statutory useful life unless another regime applies.

So the special measure’s main added value, for eligible blue-return filers, is the ¥100,000–¥400,000 band. That’s exactly where most individual guesthouse furnishing purchases land — a queen mattress and frame, a decent TV, a smart lock system, a washer-dryer combo.

Which Guesthouse Purchases Actually Qualify?

The threshold is judged by the unit normally traded as one unit — one item, one machine, one set, or one complete group — not simply by invoice total, which is where most people trip up. If you buy five mattresses in one order at ¥150,000 each, that’s ¥750,000 on the invoice — but a mattress is normally traded as its own unit, so all five can qualify at ¥150,000 each (as long as your running annual total across all such purchases stays under ¥3,000,000). What doesn’t split this way is something that’s normally traded or functions as a set — a dining set, a built-in kitchen unit, or a sectional system that’s not usable in parts is generally treated as a single asset, and priced accordingly.

Typical items that land in the sweet spot for a guesthouse: beds and mattresses, washer-dryers, TVs, smart lock systems, standalone air-conditioning units, and individual furniture pieces. Anything ¥400,000 or more per unit — a full HVAC system replacement, for instance — generally falls back to standard depreciation regardless of your filing status.

What Do You Need to Do to Claim It?

To use this special measure, you need to be an eligible small business taxpayer or SME filing a blue return (青色申告), using the asset in business, real-estate, or forestry income activities. Assets used for lending are excluded unless lending is a main line of your business, and corporations also need to meet the post-2026 SME size limits, including an exclusion for corporations with more than 400 regular employees. If you’re unsure whether your business structure qualifies, it’s worth confirming with your accountant before assuming an asset is covered.

The procedure differs slightly depending on how you file. Individual blue-return filers enter each qualifying asset in the depreciation section of their blue return financial statement, note the special measure (措法28の2) against it, and keep the supporting asset details — accounting software or e-Tax’s preparation tools typically generate the equivalent detail automatically once assets are entered one by one. Corporations instead attach the relevant depreciation and detail schedules, such as the applicable 別表16-related statements, to their return.

It’s also worth separating two documentation rules that often get mixed up. For income or corporate tax purposes, you just need proper books and a supporting receipt for the expense. For the consumption tax input credit, you separately need to keep qualified invoices (or a permitted substitute) — showing the issuer’s registration number and tax-rate breakdown — for the purchases you’re claiming credit on. If the purchase was an electronic transaction, keep the electronic data itself under the Electronic Bookkeeping Act rather than a printout; a paper receipt from an in-person purchase can still be kept on paper unless you’re using scanner storage. A receipt tool such as Reshito can help extract date, payee, amount, tax rate, and invoice number into searchable records.

FAQ

Q: What happens if I’m not an eligible blue-return filer?

You can still expense anything under ¥100,000 immediately, and you can optionally use 3-year aggregate depreciation for assets from ¥100,000 to under ¥200,000. But the ¥200,000–¥400,000 band is off-limits without eligible blue-return status, which is one reason it may be worth discussing with your accountant if you’re running an active guesthouse.

Q: Does the exception apply to secondhand furniture and equipment?

Yes — used assets qualify on the same basis as new ones, valued at their actual purchase price, which makes budget-furnishing a property through secondhand markets an efficient option from a tax perspective too.

Q: What happens if I go over the ¥3,000,000 annual cap?

Purchases beyond the cap in that tax year/business year don’t qualify for immediate expensing under this measure and fall back to standard depreciation — and if the business year, opening year, or closing year is shorter than 12 months, the cap itself is prorated by month. So if you’re doing a large multi-property furnishing push in one year, it’s worth timing purchases across tax years where possible to stay under the ceiling.

This post is for informational purposes only and does not constitute legal or tax advice. Please consult a qualified professional for your specific situation.