Capital-gains tax on property

How the taxable gain works

Capital-gains tax (譲渡所得) applies to the taxable gain after the allowable basis, costs, and relief — not the gross sale price. Sale price minus purchase price is not necessarily the taxable gain: depreciation reduces the basis (especially for a property that was rented and depreciated), and allowable transaction costs on both purchase and sale affect the calculation. The holding period matters too, because a separate reduced-rate provision may apply to certain long-held residences. Keep the purchase contract, cost evidence, and renovation records, because you need them to establish the basis.

Principal-residence relief

A qualifying principal residence sold at a gain may be eligible for a deduction of up to ¥30 million from the taxable capital gain, subject to detailed conditions and interactions with other relief, and a separate reduced-rate provision may apply to certain long-held residences. These reliefs can materially change or eliminate the tax, but they are conditional and can interact with the mortgage deduction and restricted years, so obtain tax advice. Do not assume the relief applies — confirm your eligibility for your specific sale and year with a tax accountant or the National Tax Agency.

Key points to carry away: Tax applies to the taxable gain after basis, allowable costs, and relief — not the gross price; Depreciation and transaction costs affect the basis and the gain; The holding period affects the applicable treatment; A qualifying principal-residence sale may access a ¥30 million deduction. 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.