Furusato Nozei Is Changing on October 1
If your feed is full of posts saying you’ll “lose out” unless you donate by September 30, here’s the short version: nothing about your tax deduction is changing. What changes is how much municipalities are allowed to spend on attracting donations, and which gifts still qualify as local products.
I read through the law and the notices published by the Ministry of Internal Affairs and Communications (MIC) and pulled out only the parts that matter if you’re the one donating.
The short answer
Change 1: a lower spending cap every October
The rule comes from an amendment to the Local Tax Act promulgated on March 31, 2026 (Act No. 2 of 2026).
Each designation year runs from October 1 to September 30. Whatever a municipality receives in that year, minus what it spent to raise it, is the money it can actually use – the law calls this the “usable donation amount.” To stay eligible for furusato nozei, that amount now has to be at least a set share of total donations. The long-term target is 60%, phased in over three years:
| Designation year | Towns must keep | Max fundraising costs |
|---|---|---|
| Until Sep 30, 2026 | — | 50% (old rule) |
| Oct 2026 – Sep 2027 | 52.5%+ | 47.5% |
| Oct 2027 – Sep 2028 | 55%+ | 45% |
| Oct 2028 – Sep 2029 | 57.5%+ | 42.5% |
| From Oct 2029 | 60%+ | 40% |
The law sets the middle column; the right-hand column is simply 100% minus that figure. Source: the amended text attached to MIC notice No. 34 (April 1, 2026).
What counts as a fundraising cost
The gift itself (still capped at 30% of the donation per item), shipping, advertising, card and payment fees, and admin – which includes commissions paid to portal sites and processing one-stop exception forms. The new cap applies to all of it added together.
The national average is already over the new cap
MIC’s annual survey, published July 31, 2026, puts total donations for fiscal 2025 at about ¥1.33 trillion. Fundraising costs came to ¥638.2 billion, or 47.9% – already 0.4 points above the 47.5% that applies from October.
Based on MIC’s furusato nozei survey (published July 2026). Solid line: the 47.5% cap from October 2026. Dotted line: the 40% cap from October 2029.
The same survey shows 97.2% of donations now come through portal sites, and what towns pay those portals works out to 18.8% of portal donations (11.5% once pass-through gift and shipping costs are stripped out). In its April 1 notice, MIC asked municipalities to review the fees they pay portal operators and other outside contractors.
Change 2: stricter “local product” rules
These come from a separate MIC notice amended on June 24, 2025, and apply to designations from October 2026. There are three main points.
On top of that, any single contractor paid ¥1 million or more in fundraising costs must now be disclosed by name, amount and purpose (fiscal 2025 figures were due by September 30, 2026).
Which gifts are most likely to be affected
Furusato Choice, one of the big portals, lists 18 categories where it expects listings to end or change:
beauty and health appliances, lotions and skincare, other beauty, health foods, air conditioning and seasonal appliances, PCs and accessories, watches, furniture, bedding, fashion, fishing gear, whisky, wine, osechi (New Year food boxes), beef tongue, lamb, salmon, chocolate
Going by the three rules above, my guess is that items made from ingredients sourced outside the area – or overseas – and only processed or packed locally, plus goods that simply carry a town’s name, are the most exposed. Furunavi also says some gifts stopped taking orders before the end of September to switch over to the new rules.
What changes for you, and what doesn’t
Should you donate before September 30?
- Yes, if there’s a specific gift sitting in your favorites or cart. Current amounts and contents are only guaranteed through September 30, and some items have already closed.
- No rush, if you just haven’t donated yet this year. The deduction rules aren’t changing, so anything you give within your limit by December 31 still counts.
If you’re donating today, this order keeps it simple:
- Check your limit first. Anything over it is just a donation with no tax benefit. Our furusato nozei guide explains how the limit works.
- Go through your favorites and cart. The portals say these are the items that may disappear or change price after October.
- Pay on the spot. Use a card or PayPay so the payment goes through immediately. Furusato Choice and Furunavi both expect heavy traffic on September 30.
- If your pick is gone, look for something similar from the same area. It’s not worth going over your limit to beat the deadline.
With portal points gone, how you pay is the edge
Since portal points were banned, the payment method is about the only place one site can beat another. The clearest example right now: paying for Yahoo! Furusato Nozei with Yahoo! Shopping gift cards, which Yahoo! added as a payment option on July 1, 2026.
Buy a ¥20,000 card and it becomes ¥21,200 in credit when you claim it. Spend that on Yahoo! Furusato Nozei and you’ve made a ¥21,200 donation for ¥20,000 – worth it only if the donation stays within your deduction limit.
The buttons in this box are affiliate links (PR). Check the terms on Yahoo! Shopping’s official page.
Two things to watch. First, the card doesn’t work until you claim it from the order details page – that’s also when the bonus is added. Leave it unclaimed for 30 days and the whole card expires. Second, since July 2026 anything you pay with these cards doesn’t earn points in Yahoo! Shopping campaigns. Furusato nozei never earns portal points anyway, which is exactly why it’s a good place to use them. The step-by-step is in our Yahoo! Shopping gift card guide.
Not on PayPay yet? Signing up with the invite code below gets you a welcome bonus, and gives you the PayPay balance you need for the gift card bonus.
Choosing between the other portals
Look at three things: whether the gift you want is listed, whether your usual payment method works there, and whether that payment method is running its own cashback campaign. Regular credit card points still apply, so paying with your highest-earning card is the easy, reliable option.
FAQ
- Q. Will my deduction be smaller if I donate after October 1?
- No. The ¥2,000 out-of-pocket amount, how your limit is calculated and the one-stop exception all stay the same. Donate within your limit by December 31 and it’s deducted as usual.
- Q. Is it true the gift budget drops from 50% to 47.5%?
- Only half true. The cap applies to total fundraising costs – gifts, shipping, portal fees, payment fees and admin combined. It’s 47.5% from October 2026, falls 2.5 points every October, and reaches 40% in October 2029. The rule that each gift can cost no more than 30% of the donation hasn’t changed.
- Q. Will every gift get more expensive or smaller?
- No. The portals say some gifts may be pulled or have their donation amount or contents changed. Items made from ingredients sourced elsewhere and only processed locally, and categories like appliances, beauty and alcohol, are seen as most at risk.
- Q. I’ve already donated but haven’t received my gift. Is it affected?
- No. Rakuten’s notice says past donations are not affected at all; the new rules only apply to donations made from October 1, 2026.
- Q. Can I still get points from portal sites?
- No. Points for donating through a portal have been banned since October 1, 2025. Points from your payment method itself, such as a credit card, aren’t covered by the ban, so you still get those.
- Q. Can I use Yahoo! Shopping gift cards at any furusato nozei store?
- No. They work on Yahoo! Furusato Nozei. The Furunavi, Furusato Choice and Satofull stores inside Yahoo! Shopping are on Yahoo!’s official excluded-store list.
- Q. Will the cap keep falling after 2029?
- Under current law, the full 60% rule applies from October 1, 2029, which caps fundraising costs at 40%. Anything beyond that would need a future tax reform.
Sources
- MIC notice No. 34, April 1, 2026, with excerpts of the amended Local Tax Act (Japanese)
- MIC notice No. 108, September 25, 2026 (Japanese)
- MIC press release on revised designation criteria, June 24, 2025 (Japanese)
- MIC furusato nozei survey results, July 31, 2026 (Japanese)
- Furusato Choice: impact of the October 2026 changes (Japanese)
- Furunavi: notice on gifts after October 1, 2026 (Japanese)
- Rakuten Furusato Nozei: notice on the October 2026 changes (Japanese)
- Yahoo! Shopping: Yahoo! Furusato Nozei guideline update (Japanese); gift card terms from Yahoo! Shopping’s gift card page, checked September 30, 2026
This is my own summary of public documents. Anything marked “my read” or “my guess” is personal opinion, not tax advice. Check each portal or municipality’s page for changes to specific gifts.
