Every tax you'll encounter when buying, holding, renting, and selling Japanese property — explained clearly for non-residents.
One-time. Assessed value is typically 50–70% of market price. Reductions apply for new housing meeting floor area requirements.
Reduced to 0.3% for new residential buildings meeting earthquake resistance standards.
Applied to the purchase agreement and mortgage contract.
Land is exempt from consumption tax. New-builds from developers are subject to CT on the building value. Private-party (resale) transactions are typically CT-exempt.
Assessed value is revalued every 3 years. Reductions: residential land under 200m² gets ⅙ reduction; 200m²+ gets ⅓ reduction.
Applies only in urbanized areas (市街化区域). Most Tokyo properties are in scope.
If you appoint a Japan-based property manager, they withhold the tax. You can file a tax return (確定申告) to claim deductions (depreciation, management fees, repairs, interest) and potentially recover over-withheld tax.
Deductions include depreciation (法定耐用年数), loan interest, management fees, repairs, property tax paid, and insurance.
Reinforced concrete (RC): 47 years / wood: 22 years. A typical Tokyo condo purchased for ¥60M with ¥30M building value depreciates ≈¥638K/year.
Holding period measured as of January 1st of the year of sale.
Non-residents: 10.21% withholding at source by the buyer if sale price ≥ ¥100M and purchased for ≥ ¥50M. Non-residents must file a Japanese return within 3 months of departure or appoint a tax agent.
Applies if you have been using the property as your primary residence. Generally not available to non-resident investors.
Japan's inheritance tax applies to Japanese-sited real property regardless of the heir's nationality or residence. Non-residents who inherit Tokyo property are liable.
Japan has estate/gift tax treaties with the US, UK, France, Germany, and others. Check if your home country has a treaty that reduces double taxation.
* Hypothetical example only. Actual tax liability depends on individual circumstances, deductions, and treaty status.
Yes. Non-residents are subject to 20.42% withholding tax on gross Japanese-source rental income unless a Japan-based property manager is in place. Filing an annual tax return allows you to deduct expenses (depreciation, management fees, repairs, interest) and potentially reclaim over-withheld tax.
For long-term holdings (over 5 years as of January 1 of the sale year), the rate is 20.315% (15.315% national + 5% local). Short-term disposals (under 5 years) are taxed at 39.63%. Non-residents must file a Japanese tax return within 3 months of departure or appoint a tax agent (税務代理人).
Yes. Japanese inheritance tax applies to real property located in Japan regardless of the heir's nationality or country of residence. The assessed value for tax purposes is typically 70–80% of market price for condominiums. Japan has estate tax treaties with several countries that may reduce double taxation.