Japan Property Taxes - A Simple Guide For Owners

Nov 22, 2023

Manga Tax Ownership

Our simple guide to property taxes in Japan: whether you are buying, selling or owning real estate

OWNERSHIP

When owning rental property in Japan, there are a few taxes to be aware of. As always, consult a professional for advice!

  1. Fixed Asset Tax: 1.4% of the ASSESSED (not actual) value of the property.
  2. Income Tax: the amount payable varies case-by-case and you should seek professional advice for unique situations. Note that in general expenses related to the rental property (like maintenance, property management fees, interest on loans for property purchase, travel to visit the property) can be deducted from the rental income.
    1. For Individuals, the progressive tax rates are as follows as at April 2023
      1. Up to 1,950,000 JPY: 5%
      2. 1,950,001 to 3,300,000 JPY: 10%
      3. 3,300,001 to 6,950,000 JPY: 20%
      4. 6,950,001 to 9,000,000 JPY: 23%
      5. 9,000,001 to 18,000,000 JPY: 33%
      6. 18,000,001 to 40,000,000 JPY: 40%
      7. Over 40,000,000 JPY: 45%
    2. For a company, it depends on what is held within the company and if there is any other associated revenue, but generally speaking:
      1. Up to 8,000,000 JPY: 20%
      2. Over 8,000,000 JPY: 26%
  3. Withholding Tax (20.24%): this is only payable on long-term leases
  4. Japanese Consumption Tax (Shouhizei): you will be paying 10% JCT if:
    1. you registered to claim a JCT refund when you bought the property and it's been less than 3 years since, or
    2. if your rental income is over 10m JPY per year net

This overview provides a general guide, but it's advisable to consult with a local tax professional for precise calculations and up-to-date information.

For information on taxation related to purchase or sale of properties, please click the appropriate link.

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