📅 2025-06-05
Learn about the major taxes you need to know when purchasing or owning real estate in Japan. Essential information on real estate acquisition tax, fixed property tax, registration and license tax, and more.
A local tax levied once when acquiring real estate. For residential properties, the rate is 3% of the fixed asset tax assessment value (land is 1.5% until 2024 as a special measure). Newly built homes can receive deductions up to 12 million yen (13 million for long-term quality housing) under certain conditions. Land also qualifies for reductions if specific requirements are met.
A national tax paid when registering real estate ownership. Ownership transfer through sale is 2% of the fixed asset tax assessment value (0.3% with special measures). Mortgage registration is 0.4% of the loan amount (0.1% with special measures). Preservation registration for new buildings is 0.4% (0.15% with special measures).
Local taxes imposed annually on property owners as of January 1st. Fixed property tax has a standard rate of 1.4% of the assessed value. City planning tax is levied up to 0.3% on properties in urbanization promotion areas. Residential land up to 200㎡ receives a special reduction to one-sixth of the tax amount.
Tax on profits from selling real estate. Properties held 5 years or less are taxed at 39.63% (income tax 30.63% + residence tax 9%) as short-term gains. Properties held over 5 years are taxed at 20.315% (income tax 15.315% + residence tax 5%) as long-term gains. Primary residence sales qualify for a special deduction of up to 30 million yen.
Taxes on inherited or gifted real estate. Inheritance tax applies progressive rates of 10-55% on amounts exceeding the basic deduction (30 million yen + 6 million yen × number of legal heirs). Gift tax applies 10-55% progressive rates after the annual 1.1 million yen basic deduction. The inheritance settlement taxation system can also be utilized for gifting.
Japanese real estate taxes are very complex and can vary by region. Before major real estate transactions, it's crucial to consult with a tax accountant (税理士) or real estate expert to calculate exact taxes and identify tax-saving strategies.