What Changes in 2027: Pay, Kids NISA, Food Tax, Pensions

This is a translation of the Japanese original. The Japanese version is authoritative; figures follow Japanese tax law.

In 2027 (Reiwa 9), January brings a smaller deduction from your monthly pay along with the start of Kids NISA and a higher contribution cap for iDeCo; April brings a 1% consumption tax on food and a tobacco tax increase; August brings finer income brackets for the high-cost medical expense benefit; and September raises the ceiling for employees' pension insurance. Month by month, the changes reach the household budget. Some of them call for action before they close: the gift tax exemption for housing funds expires at the end of 2026, and the grace period for inheritance registration ends on 31 March. We have separated what is decided, what is awaiting legislation and what is undecided, and set it all out in chronological order. Each item is covered in detail in its own article.

Money changes in 2027 - a chronological table

When	What changes	Who it affects	Effect on take-home pay or spending	Status
31 December 2026	Deadline for the gift tax exemption on housing acquisition funds (up to 10 million yen)	People receiving housing money from a parent	Gift tax applies unless the gift is made within the year	Decided
1 January 2027	The revised withholding tax table cuts the monthly deduction from pay	Employees and part-timers generally	Take-home pay rises by several hundred to 3,000 yen a month	Decided
1 January 2027	The basic deduction amount used for withholding on public pensions is raised	Pension recipients	The deduction from pension payments falls	Decided
1 January 2027	Kids NISA (ages 0 to 17, 600,000 yen a year, 6 million yen cap)	Households raising children	More tax-free investment room in the child's name	Decided
January 2027	The iDeCo contribution cap is raised (employees from 23,000 to 62,000 yen a month, and so on)	Employees and the self-employed	More income deductions available	Decided
For 2027 (from January)	The single-parent deduction goes from 350,000 to 380,000 yen, and the blue-return special deduction to 750,000 yen	Single parents and blue-return filers	Tax falls (the 750,000 yen requires electronic books and electronic filing)	Decided
Filing deadlines on or after 1 January 2027	An exclusion is added to the 10% surcharge on the heavy additional tax for electronic transaction data	Businesses	No surcharge if your system meets the requirements	Decided
31 March 2027	The grace period for the inheritance registration obligation ends (for inheritances before March 2024)	People holding inherited property that is not yet registered	After that date, a non-penal fine of up to 100,000 yen may apply	Decided
1 April 2027	Consumption tax on food and drink goes from 8% to 1% (until March 2029)	Everyone	About 6.5% comes off the food bill	Awaiting legislation
1 April 2027	The national tobacco tax rises by 0.5 yen per stick (the first of three annual rises)	People who buy tobacco	10 yen more tax per pack	Decided
April 2027	The National Pension premium goes to 18,290 yen a month	The self-employed, students, people not working	370 yen more a month	Decided
April 2027	Revision of pension amounts (for fiscal 2027)	Pension recipients	To be announced in January 2027	Undecided
During fiscal 2027	Advance payment of the worker burden-relief benefit	Working people on low to middle incomes	A benefit (amount and timing undecided)	Awaiting legislation
August 2027	The income brackets for the high-cost medical expense benefit are subdivided (the second stage of the review)	People facing large medical bills	The monthly cap moves up or down with your income	Decided
September 2027	The ceiling on standard monthly remuneration for employees' pension insurance goes from 650,000 to 680,000 yen	Employees paid more than 650,000 yen a month	Premiums rise (and so does the future pension)	Decided

"Decided" means fixed by law or official notice, "awaiting legislation" means the outline has cleared the Cabinet and the law itself is still to pass, and "undecided" means the figures are not out yet. What changed in October 2026 is collected in Money changes from October 2026.

By 31 December 2026: make the housing gift within the year

The gift tax exemption for money received from a parent or grandparent to buy a home (10 million yen for an energy-efficient house, 5 million yen otherwise) applies to gifts made by 31 December 2026. It only becomes tax-free once you file for it in the following March, so you need to receive the gift within the year and also keep an eye on the requirement to acquire and move into the home by 15 March of the year after the gift. The details are sorted out in The gift tax exemption for housing funds runs to the end of 2026.

January 2027: smaller deductions from pay, Kids NISA, a higher iDeCo cap, and the 750,000 yen blue return

Your monthly deduction from pay falls (the revised withholding tax table)

The fiscal 2026 tax reform raised the basic deduction to 1.04 million yen (for total income of 4.89 million yen or less) and the minimum guaranteed employment income deduction to 740,000 yen. For 2026 this is settled in one go at the year-end adjustment in December, but salaries paid on or after 1 January 2027 use the "Reiwa 9 withholding tax table", which builds in the revised deductions, so the monthly deduction falls[National Tax Agency]. As a guide, that is about 700 yen a month at an annual income of 3 million to 4.5 million yen, and about 3,100 yen a month at 5.5 million to 6.5 million yen. Pension recipients see the same thing: the basic deduction amount used for withholding is raised from the payments made in January 2027. Note, however, that this top-up only runs through 2027; for 2028 the basic deduction is set to return to 620,000 yen. For the amounts by income level, see The 1.04 million yen basic deduction only runs through 2027.

Kids NISA begins

From January 2027 a NISA accumulation investment allowance becomes available for children aged 0 to 17. The annual allowance is 600,000 yen, the tax-free holding limit is 6 million yen, and the eligible products are investment trusts suited to long-term, regular, diversified investing. From age 12, money can be withdrawn with the child's consent for purposes that serve the child. At 18 the account moves automatically into the adult NISA[Financial Services Agency]. What the scheme contains and what to watch for with gift tax are collected in Kids Support NISA.

The iDeCo contribution cap rises

In December 2026 the age limit for joining is extended to under 70, and the contribution cap is raised from the contributions made in January 2027. Employees without a corporate pension go from 23,000 yen a month to 62,000 yen, and the self-employed go from 68,000 yen to 75,000 yen combined with the National Pension Fund[Ministry of Health, Labour and Welfare]. The whole contribution is an income deduction, so someone in the 20% bracket who raises contributions to the cap saves about 90,000 yen of tax a year. For the full picture including the tax on the way the money comes out, see The December 2026 iDeCo reform.

Income tax for 2027: a 380,000 yen single-parent deduction and a 750,000 yen blue-return special deduction

The single-parent deduction goes from 350,000 to 380,000 yen from 2027 (Reiwa 9)[Ministry of Finance, tax reform outline]. From 2027 the blue-return special deduction comes in three tiers: 750,000 yen for those who meet both electronic filing and electronic books, 650,000 yen for electronic filing alone, and 100,000 yen otherwise. What to get ready this year is explained in The 750,000 yen blue-return special deduction.

31 March 2027: the grace period for inheritance registration ends

Inheritance registration became compulsory on 1 April 2024, and inheritances that arose before that date must also be applied for by 31 March 2027. This date applies even if it falls before the ordinary deadline of three years from the day you learned of the inheritance. Leaving it without a legitimate reason can bring a non-penal fine of up to 100,000 yen. The registration licence tax exemption for land valued at 1 million yen or less also runs only to 31 March 2027. For the procedure, see Compulsory inheritance registration.

April 2027: 1% consumption tax on food, tobacco tax, and the National Pension premium

Consumption tax on food and drink goes from 8% to 1% (awaiting legislation)

The outline approved by the Cabinet on 15 September 2026 sets a 1% rate on food and drink covered by the reduced rate, for the two years from 1 April 2027 to 31 March 2029. Eating out and alcohol stay at 10%. Using the Family Income and Expenditure Survey for households of two or more people (monthly food spending of 94,895 yen, less alcohol and eating out), the saving works out at about 58,000 yen a year. The bill is expected to go to the extraordinary Diet session in the autumn, though, and nothing is fixed until it passes. The eligible items and the household calculation are in The consumption tax cut on food, and the benefit that comes when the rate returns to 8% in 2029 is in The end of the tax cut and the benefit.

The tobacco tax rise (the first of three annual rises)

To fund defence spending, the national tobacco tax rises by 0.5 yen per stick in April 2027, April 2028 and April 2029. That is 10 yen of tax on a pack of 20, and 30 yen over three years. How far shop prices move is settled by each company's application for approval. A list that also covers the October 2026 rise on heated tobacco is in The tobacco price rise calendar.

The National Pension premium is 18,290 yen a month

The National Pension premium for fiscal 2027 (Reiwa 9) is 18,290 yen a month, up 370 yen from 17,920 yen in fiscal 2026[Japan Pension Service]. Paying two years in advance brings a large discount, and the social insurance premium deduction can be taken either all in the year you pay or split across each year.

The pension revision and the worker burden-relief benefit are undecided

Pension amounts for fiscal 2027 will be announced in January 2027, based on the previous year's prices and wages. The worker burden-relief benefit, designed alongside the food tax cut, is planned as an advance payment in fiscal 2027 to bridge the gap until full introduction in fiscal 2029, but the income range, the amount and the timing are all undecided. The framework that has been settled is explained in How to receive the worker burden-relief benefit.

August 2027: finer income brackets for the high-cost medical expense benefit

The high-cost medical expense benefit had its out-of-pocket caps raised in August 2026, and an annual cap was newly created. August 2027 brings the second stage, in which the income brackets are subdivided, so the monthly cap moves up or down depending on your income. The design gives some weight to lower-income households, for instance by lowering the cap for multiple qualifying months for those on less than 2 million yen a year. You can check what the figure is at your own income in the quick reference table in The high-cost medical expense benefit.

September 2027: the employees' pension ceiling goes from 650,000 to 680,000 yen

The ceiling on standard monthly remuneration for employees' pension insurance (currently 650,000 yen) rises in stages to 680,000 yen in September 2027, 710,000 yen in September 2028 and 750,000 yen in September 2029. Premiums rise for employees paid more than 650,000 yen a month; for someone on 680,000 yen a month the personal share goes up by about 2,700 yen a month. The employer pays the same amount again. In return, the future employees' pension is larger.

Beyond that: the basic deduction top-up ends in 2028, and the survivors' pension becomes fixed-term

For 2028 income tax, the basic deduction returns to 620,000 yen for people with total income above 1.32 million yen, which is expected to mean 20,000 to 43,000 yen more tax a year at annual incomes of 2.5 million to 6.65 million yen (The 1.04 million yen basic deduction only runs through 2027). In April 2028, the survivors' employees' pension for a spouse with no children becomes, as a rule, a fixed-term benefit of five years (The survivors' employees' pension becomes a five-year fixed-term benefit from April 2028).

By situation: which of these reaches you

Situation	Act first on	Can be left to happen
Employees	Changing your iDeCo contribution (from January); making the housing gift within the year	The smaller deduction from pay in January; the September pension ceiling (only above 650,000 yen a month)
Sole proprietors	Getting electronic books and electronic filing ready for the 750,000 yen blue return; paying the National Pension in advance	Businesses selling food and drink need to handle the 1% consumption tax (with a separate judgment on filing notifications)
Households raising children	Preparing a Kids NISA account (check when your provider starts accepting applications)	The larger single-parent deduction is applied automatically at the year-end adjustment
Pensioner households	Any outstanding inheritance registration, by the end of March	The smaller deduction from pension payments in January, the April pension revision, the August high-cost medical expense benefit

Frequently asked questions

When can I apply for Kids NISA?

The scheme starts on 1 January 2027, and each financial institution will announce when it begins accepting accounts. The usual route is to open the child's account at the institution where you already hold your adult NISA account. The 600,000 yen annual allowance is available from January.

Summary

From January 2027, a revision to the withholding tax table will reduce monthly tax deductions from pay. Higher contribution limits for Children's NISA and iDeCo will also begin.
The gift tax exemption for funds to acquire housing runs through December 31, 2026, and the grace period for inheritance registration runs through March 31, 2027.
From April 1, 2027, the consumption tax on food and beverages is set to drop from 8% to 1% (pending legislation), and the national tobacco tax will rise by ¥0.5 per cigarette.
In August 2027, income brackets for the high-cost medical care benefit will be subdivided further, and in September the cap on standard monthly remuneration for the employees' pension will rise from ¥650,000 to ¥680,000.
In 2028, the basic deduction is scheduled to return to ¥620,000. Changes to pension amounts and worker burden-relief subsidies remain undecided.