The "Green Gift" tax system was included in the Outline of the Tax Revision for Fiscal 2015, which the ruling party decided on Dec 30, 2014.
With the system, money gifted to install facilities at the time of newly building, purchasing or remodeling a residential house in the aim of reducing carbon emissions (e.g. solar power generation facilities, solar thermal power systems, geothermal power systems, high-efficiency water heaters and fuel cell-based co-generation systems) can be exempted from tax. Such houses are considered to meet some power-saving standards, and money donated for them is exempted from gift tax.
The Green Gift was realized by adding heat insulation standards and "standards for primary energy consumption (grade: four or higher)" to requirements for exemption from gift tax on residential houses.
The Green Gift is aimed at encouraging grandparents to give money to their children/grandchildren for use of renewable energy-based power generation facilities and power-saving facilities and realizing both succession of assets and contribution to the betterment of the environment. Specifically, when grandparents give money to their children/grandchildren for the installation of solar power generation facilities, fuel cell-based co-generation systems, etc, under some conditions, the money is exempted from gift tax.
With the Green Gift, grandparents can make a meaningful gift that can contribute to the betterment of the earth's environment while their children/grandchildren can reduce utility costs and gain an income from selling solar electricity, etc. Also, the installation of low-carbon-emission facilities and renovations for adding energy-saving facilities are expected to create business opportunities for local device/parts makers and contractors, energize local economies and revitalize local communities.
This system was proposed by the Institute for Global Environmental Strategies (IGES, public interest incorporated foundation). Based on its own research, IGES concluded that 20% of the households headed by those who are in their 60s or older (about four million households per year) are highly likely to give about ¥3 million (approx US$25,512) on average by using the system.
This will create a positive economic impact of about ¥12 trillion, contributing to the large-scale introduction of renewable energy-based power generation facilities and power-saving facilities and the reduction in the import of fossil fuel, IGES said.