Selling property in Japan as a foreigner: the five-year line, the withholding, the wire home.

How much tax does a non-resident pay on selling Japanese property?

Gains on land and buildings are taxed separately: 15% national income tax if held long-term, 30% if short-term, each plus the 2.1% reconstruction surtax, giving 15.315% and 30.63%. Residents also pay local inhabitant tax, but it is assessed on people with an address in Japan on 1 January, so non-residents generally do not.

For a resident, the totals with inhabitant tax are 20.315% and 39.63%. The difference is worth checking against where you actually live on 1 January of the sale year.

When does a Japanese property count as long-term?

When it has been held more than five years as of 1 January of the year you sell. Counting five years from the purchase date is not enough. In practice the property has to be held into its sixth calendar year-start, so a sale timed a few months later can halve the rate on the gain.

Example of the rule, not advice: a property bought in March of year one is still short-term throughout year six, because on 1 January of year six it has been held under five years. It becomes long-term for sales from 1 January of year seven.

What is the 10.21% withholding on a sale by a foreigner?

When the seller is a non-resident, the buyer must withhold 10.21% of the gross sale price and pay it to the tax office. It does not apply when the price is JPY 100M or less and the buyer is an individual buying the home for their own or relatives' residence. The seller files a return to settle.

The withholding is on the price, not the gain, so it can be more or less than your final tax. The return is where it is trued up. A non-resident needs a tax representative (nōzei kanrinin) in Japan to file.

What do you need to sell a property in Japan?

The Registration Identification Information you received on purchase: the 12-character code that replaced the paper title certificate. It is what you need to sell or mortgage. A judicial scrivener files the transfer to the buyer at the Legal Affairs Bureau, and the buyer's broker gives the buyer the statutory Explanation of Important Matters.

If you live abroad, your registration already names a domestic contact in Japan (required since 1 April 2024); make sure that person can still be reached. More on the register: Japan's property registration (tōki), explained.

Can a foreigner take the sale money out of Japan?

Yes. No approval is needed to take sale proceeds out of Japan; the country uses post-transaction reporting to monitor cross-border payments. The main exit friction is tax, meaning the 10.21% withholding on the price until your return is filed, not a currency control.

The money-in side, and the reports Japan uses instead of approvals: transferring money to Japan for a property.

Will the sale tax rates in Japan change from 2027?

Not confirmed 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 10.21%, 15.315% or 30.63% change was not confirmed.

If your sale falls in 2027 or later, check the NTA pages linked here before you model the exit.

Header photo: Panoramio user 1572443, CC BY-SA 3.0, via Wikimedia Commons. All credits: image credits.