Property taxes in Japan
Buying, owning, renting out, and selling property — the taxes at each stage.
Buying property brings real-estate acquisition, registration, and stamp taxes; owning it brings annual fixed-asset and city-planning taxes; renting it out creates real-estate income; and selling it is a separate capital-gain transaction — not rental income.
Effective: 2026-01-01 to 2026-12-31
Professional review pending — treat as draft and confirm with the authorities.
Key points
- Purchase: real-estate acquisition tax, registration and license tax, stamp tax, and building consumption tax.
- Ownership: annual fixed-asset tax and city-planning tax, assessed and billed by the municipality.
- Renting: rent, nonrefundable deposits, and renewal fees are income; interest and depreciation are deductible, principal is not.
- Selling: a separate capital gain with holding-period rules — land and building are treated differently.
Buying and owning
Acquiring real property can trigger real-estate acquisition tax (prefectural), registration and license tax on the title transfer and any mortgage, stamp tax on paper contracts, and consumption tax on the taxable building component (land is treated differently). Registration tax uses statutory rates on assessed values — for example, the ordinary land-sale title-transfer rate is 2%, with temporary reduced rates that must be rechecked by transaction date. Once you own, the municipality bills annual fixed-asset and city-planning taxes based on the January 1 owner and assessed value.
Renting out and selling
Rental income includes rents, nonrefundable deposits, renewal fees, and tenant reimbursements. Deductible expenses include fixed-asset tax, insurance, depreciation, repairs, and the rental-related portion of loan interest — but loan principal is never deductible, and capital improvements are depreciated, not expensed. Selling is not rental income: it is a separate capital-gain transaction with short- and long-term holding distinctions, and you must separate land from building because land is not depreciated. Keep the purchase contract, land/building allocation, and depreciation history.
Who this is for
- Buyers, homeowners, and landlords
- People selling a Japanese property
What this is not
- Exact municipal assessments and reliefs
- Inheritance of property (separate rules)
- Acquisition, registration, and stamp reliefs are temporary and date-sensitive; confirm the rate for your transaction date. Missing cost records on an old property need a professional to reconstruct basis.