Japan property tax for foreigners: on the way in, every year, on the rent, on the way out.

What taxes do you pay when buying property in Japan?

Two main taxes, both on the government's assessed value rather than the price. Real estate acquisition tax, a prefectural tax, is 3% on land and residential buildings acquired by 31 March 2027 (standard 4%). Registration and license tax on a sale is 1.5% on land until 31 March 2029 and 2% on the building.

Residential land is taxed for acquisition tax on half its assessed value until 31 March 2027. The building rate drops to 0.3% only for a qualifying residence with a municipal certificate; whether a non-resident investor can use it is uncertain, so budget 2%. Stamp tax on the contract is JPY 10,000 for a contract of JPY 10M to 50M. All one-off costs: Japan property buying costs.

What is the annual property tax in Japan?

Fixed asset tax at a standard rate of 1.4% on land and buildings, plus city planning tax of up to 0.3% where the property sits in a city planning zone, which covers most of Tokyo's 23 wards and Osaka City. Both are charged on the assessed value and billed to the owner of record on 1 January.

Residential land gets relief. For up to 200 m² per dwelling, fixed asset tax is charged on one sixth of the assessed value and city planning tax on one third. Above 200 m² the fractions are one third and two thirds. A condo unit's share of the land normally falls inside the 200 m² band.

How is rental income taxed for a non-resident owner in Japan?

Rent from Japanese property is Japan-source income. The payer must withhold 20.42% of the gross rent, unless an individual tenant rents the home for their own or relatives' residence. Net rental income is then taxed at progressive national rates from 5% to 45%, plus the 2.1% reconstruction surtax, through an annual return.

• Filing window: 16 February to 15 March of the following year. The tax withheld is credited.
• Tax representative: a non-resident must appoint one (nōzei kanrinin) in Japan.
• Rates: seven national bands from 5% to 45%, as of 1 April 2026.

What is capital gains tax on Japanese property?

Gains on land and buildings are taxed separately from other income. Long-term, meaning held more than five years as of 1 January of the year of sale, the national rate is 15%. Short-term, it is 30%. The 2.1% reconstruction surtax is added to the tax, which gives the commonly quoted 15.315% and 30.63%.

Mind the 1 January test. Five years counted to the day is not enough: in practice the property must be held into its sixth calendar year-start before the long-term rate applies.

Residents also pay local inhabitant tax on the gain (5% long-term, 9% short-term, for totals of 20.315% and 39.63%). Inhabitant tax is assessed on people with an address in Japan on 1 January, so a genuine non-resident generally pays only the national rates.

What is the 10.21% withholding when a non-resident sells?

When a non-resident sells Japanese property, the buyer must withhold 10.21% of the gross sale price and pay it to the tax office. There is no withholding if the price is JPY 100M or less and the buyer is an individual buying the home for their own or relatives' residence. The seller then files a return to settle.

The withholding is a prepayment, not the final tax. The real tax is worked out on the gain in the return. Step by step: selling property in Japan as a foreigner.

Will Japan's property tax rates for foreigners change in 2027?

Possibly, and it was not settled as of September 2026. The National Tax Agency notes that from tax year 2027 the 10.21% withholding comprises income tax, a new defence special income tax and reconstruction tax, and that the reconstruction surtax now runs to 2047. Whether the headline rates on this page change was not confirmed.

Treat 20.42%, 10.21%, 15.315% and 30.63% as the 2026 figures. Check the NTA pages again for anything that settles in 2027 or later.

Header photo: Loggieloggie, CC0, via Wikimedia Commons. All credits: image credits.