Fixed-asset and city-planning tax
Annual liability, assessed value, prorations, and budgeting.
Fixed-asset tax (固定資産税) is an annual municipal tax based on the assessed value, and city-planning tax (都市計画税) applies within designated urban-planning areas; at closing the year’s tax is commonly prorated economically between seller and buyer by contract.
Key points
- Fixed-asset tax is an annual municipal tax based on the assessed value.
- City-planning tax applies within designated urban-planning areas.
- At closing the year’s tax is commonly prorated economically by contract.
- Budget it as a recurring annual ownership cost.
The annual cost of ownership
Fixed-asset tax (固定資産税) is an annual local tax based on the assessed value of the property, billed by the municipality — it is a recurring cost of ownership, not a one-time purchase cost. Within designated urban-planning areas, an additional city-planning tax (都市計画税) applies. Together these are a meaningful yearly outflow that you should build into your monthly housing budget from the start, alongside insurance, management and repair-reserve fees (for a condominium), and maintenance.
Proration at closing
Legal liability for the year’s fixed-asset tax follows statutory rules (the owner as of a set date), but at closing the seller and buyer commonly prorate the tax economically by contract, so each effectively pays for the portion of the year they own the property. Confirm how the proration is handled in your contract so the figure at closing is not a surprise. After purchase, budget the full annual tax each year, and remember the assessed value — and therefore the tax — can change over time.
Key points to carry away: Fixed-asset tax is an annual municipal tax based on the assessed value; City-planning tax applies within designated urban-planning areas; At closing the year’s tax is commonly prorated economically by contract; Budget it as a recurring annual ownership cost. Use the linked guides and calculators for the full decision, and confirm anything material with the lender, a licensed broker, a judicial scrivener, or a tax accountant before you act.
Who this is for
- New owners budgeting annual costs
- Buyers checking proration
What this is not
- A precise tax computation
- Fixed-asset tax is a recurring annual cost; budget it every year, and confirm the closing proration in your contract.
Frequently asked questions
What is fixed-asset tax?
An annual municipal tax based on the assessed value of the property.
What is city-planning tax?
An additional local tax in designated urban-planning areas.
Who pays the current year’s fixed-asset tax at closing?
Seller and buyer commonly prorate it economically by contract; legal liability follows statutory rules.