Tax (Individual)
Real Estate Taxation in Japan for non-resident individual
- ※ For further details, please consult a certified tax accountant.
| Tax Item | Taxable Period | Non-resident |
Administrative Division |
|---|---|---|---|
| Registration Tax | acquisition |
|
Legal Affairs Bureau Tax Office |
| Real Estate Acquisition Tax | acquisition |
|
Local Tax Bureau |
| Stamp Duty | acquisition |
|
Tax Office |
| sale |
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| Consumption Tax (incl. Local Consumption Tax) | acquisition |
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| rent |
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| sale |
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| Individual Income Tax *Withholding tax system is available. | acquisition |
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| sale |
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| Inheritance Tax / Gift Tax |
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| Property Tax and City Planning Tax | rent |
|
Municipal Office |
- Inhabitant tax does not apply to non-resident individual.
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:taxation
:conditional taxation
:tax exemption
Summary of Tax
| Registration Tax |
Registration Tax is levied on the registration of the preservation or
transfer of ownership of land or buildings when
they are constructed or purchased. Tax amount = assessed property tax value x tax rate (land 1.5%, building 2.0%) (note) The tax rate for land is subject to a reduced rate until March 31, 2026. |
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|---|---|---|---|---|---|---|---|---|---|
| Real Estate Acquisition Tax |
Real Estate Acquisition Tax is levied on the acquirer of real estate when it
is acquired, newly constructed, or expanded. Tax amount = tax base (property tax assessed value)※1 x tax rate※２ ※1 In the case of residential land, the tax base of such land will be 1/2 of its value until March 31, 2027. ※2 Tax rates are as follows;
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| Stamp Duty |
Stamp duty is imposed on taxable documents. Taxable documents include real
estate sales contracts, construction
contracts, and loan agreements. The amount of tax is calculated based on the
contract amount. Tax amount = 0 yen to 480,000 yen (reduced until March 31, 2027) |
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| Consumption Tax (incl. Local Consumption Tax) |
Consumption Tax is levied on domestic transactions by businesses in Japan.
The tax is levied on the transfer price of
buildings, brokerage commissions, etc. Consumption Tax does not apply to
transfer and leasing of land. Tax amount = tax base x 10% (2.2% of 10% is local consumption tax) For an overview of consumption tax, please access the following URL on the National Tax Agency (NTA) website. National Tax Agency HP Outline of Consumption Tax |
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| Individual Income Tax |
Non-resident individuals are levied on real estate taxable income which is
revenue from real estate less expenses and taxable capital gain realized on
property sale. tax rate
of taxable income earned from property leaseJPY 1,000 – JPY 1,950,000 5.105% JPY 1,950,000 – JPY 3,300,000 10.21% JPY 3,300,000 – JPY 6,950,000 20.42% JPY 6,950,000 – JPY 9,000,000 23.483% JPY 9,000,000 – JPY18,000,000 33.693% JPY 18,000,000 – JPY 40,000,000 40.84% More than JPY 40,000,000 45.945% tax rate
of capital gain on property sale When possessed more than 5 years 15.315% When possessed 5 years or less 30.63% ＊When a Japanese Residence/Individual sells a property with any capital gain, 5% or 9% residence tax would be on top to the above mentioned Income tax rate. |
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| Inheritance Tax |
Inheritance Tax is levied on the inheritance of property based on a person's
death (including non-residents). Even
non-residents of Japan are subject to the tax on real estate in Japan. In
addition, if real estate is held through a
Japanese corporation, shares issued by the Japanese corporation are subject
to inheritance tax.
In other words, if a foreign corporation purchases Japanese real estate or
establishes a subsidiary in Japan to purchase
real estate, no Inheritance Tax is imposed on shares issued by
the foreign corporation.
Inheritance tax rates JPY 10,000,000 or less 10% JPY 30,000,000 or less 15% JPY 50,000,000 or less 20% JPY 100,000,000 or less 30% JPY 200,000,000 or less 40% JPY 300,000,000 or less 45% JPY 600,000,000 or less 50% More than JPY 600,000,000 55% |
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| Gift Tax |
Gift tax is imposed on individuals (including nonresidents) who acquire
property by gift. The tax is also imposed on the
donation of real estate in Japan or the donation of funds to purchase real
estate in Japan.
In other words, if a foreign corporation purchases Japanese real estate or
establishes a subsidiary in Japan to purchase
real estate, no gift tax is imposed on shares issued by the foreign
corporation. Gift tax
rates JPY2,000,000 or less 10% JPY3,000,000 or less 15% JPY 4,000,000 or less 20% JPY 6,000,000 or less 30% JPY 10,000,000 or less 40% JPY 15,000,000 or less 45% JPY 30,000,000 or less 50% More than JPY 30,000,000 55% |
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| Property Tax and City Planning Tax |
Property Tax and City Planning Tax are levied on property owners as of
January 1 of each year. Property Tax = tax base※1 x 1.4% (standard tax rate) City Planning Tax = tax base※1 x 0.3% (maximum tax rate) ※1 The tax base is calculated based on the property tax assessed value, and the property tax assessed value is reassessed every three years. In addition, there are special exceptions to the tax base for residential land and tax reduction measures for newly constructed housing. |
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Related Taxation System
| Taxation of Real Estate Incorporated Shares |
If a non-resident transfers shares issued by a Japanese corporation, in
principle, no tax is levied in Japan on the gain
from the transfer.
However, if such transferred shares are Real Estate Incorporated Shares※1
and meet certain requirements※2 , income tax
will be levied on the gain from the transfer.
If a tax treaty is applicable, the tax relationship under the tax treaty
will prevail. ※1 Real Estate Incorporated Shares These are shares issued by corporations (including foreign corporations) whose total value of real estate located in Japan (including shares, etc. of other real estate corporations) is 50% or more of the total value of their total assets. ※2 Certain requirements mean that both of the following two requirements must be met. ①The share transferee must be a specially related shareholder, etc.※3 of the real estate-related corporation. ② Special shareholders, etc. of the real estate-related corporation own more than 2% of the shares issued by the real estate-related corporation as of the day before the first day of the fiscal year of transfer. ※3 Special related shareholder, etc. means "a shareholder of a real estate-related corporation" and "a family member, etc. of such shareholder". |
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- (Based on the 2024 Tax Reform)
※1 Determination of tax withholding on rental by non-resident individual
Status
Is lessor a non-resident?
NO
YES
Is lessee an individual?
NO
YES
Lessee or his/her relatives residing?
NO
YES
Tax Withholding
N/A
withhold tax
（20.42％）
（20.42％）
N/A
Method of Taxation
Tax Return
Comprehensive
Taxation
Comprehensive
Taxation
※2 Determination of tax withholding on property sales by non-resident individual
Status
Is seller a non-resident?
NO
YES
Is purchaser an individual?
NO
YES
For residence of purchaser or his/her relatives?
NO
YES
JPY100,000,000 or less?
NO
YES
Tax Withholding
N/A
withhold tax
（10.21％）
（10.21％）
N/A
Method of Taxation
Tax Return
Comprehensive
Taxation
Comprehensive
Taxation