後楽地所株式プレミアム不動産投資シミュレーター Premium Real Estate Investment Simulator by Koraku Realty 后乐地所高端房地产投资模拟器

Income Tax

Rental income earned by non-residents from real estate in Japan is generally subject to a 20.42% withholding income tax (including special reconstruction income tax). By filing a final tax return, income tax rates (progressive taxation) are applied to the income after deducting necessary expenses, and the difference from the withheld tax amount is either refunded or requires additional payment. Tax rates may differ or be exempt based on tax treaties.

Property Tax / City Planning Tax

Owners as of January 1st each year are subject to Property Tax (standard rate 1.4%) and, if located within an urbanization promotion area, City Planning Tax (maximum rate 0.3%). Rates may vary by municipality. The tax amount is calculated based on the fixed asset tax valuation.

Capital Gains Tax

Tax is levied on the profit (capital gains) obtained from selling real estate. The tax rate depends on the holding period (determined as of January 1st of the year of sale): Short-term (holding period 5 years or less): Approx. 39.63% (Income Tax 30% + Special Reconstruction Tax + Resident Tax 9%). Long-term (holding period over 5 years): Approx. 20.315% (Income Tax 15% + Special Reconstruction Tax + Resident Tax 5%). Tax is levied on the income after deducting acquisition costs and transfer expenses.

Real Estate Acquisition Tax

This tax is levied once when acquiring real estate. The standard rate is 4% of the fixed asset tax valuation, but there are reduction measures for land and residential houses (e.g., residential land 3%).

Registration and License Tax

Levied when performing registrations such as ownership transfer or mortgage setup. The rate depends on the type of registration and the fixed asset tax valuation.

Stamp Duty

Required when creating taxable documents such as real estate sales contracts or loan agreements. The amount depends on the contract value.

Consumption Tax

Building sales (new or used) conducted by businesses are generally subject to 10% consumption tax. However, land sales and sales of used residential properties between individuals are exempt. For rental income, residential rent is non-taxable, while office or shop rent is taxable.

Tax Representative

Non-residents without an address in Japan must appoint a tax representative to handle tax-related procedures (final returns, payments, etc.) and notify the tax office.