Residential land exception 住宅用地の特例(jūtaku yōchi no tokurei)

Land that has a house on it is taxed on a reduced value: for the first 200 m² per home, fixed-asset tax is calculated on one-sixth of the value (one-third for city planning tax); above that, on one-third (two-thirds).

This is why demolishing an empty house can raise the land tax sharply — and why a formal recommendation against a poorly managed vacant house matters: it can remove the relief.