Taxes when selling property in Japan
Separate capital gains, holding periods, basis, depreciation, and owner-occupier relief.
Selling property is a separate capital-gain transaction (not rental income): the gain is sale price minus basis and selling costs, taxed at short- or long-term rates by holding period, with the basis reduced by depreciation already taken — and owner-occupiers may get special relief.
Effective: 2026-01-01 to 2026-12-31
Professional review pending — treat as draft and confirm with the authorities.
Key points
- A sale is a separate capital gain, not rental income.
- Gain = sale price − basis − selling expenses.
- Short- vs long-term rates depend on the holding period.
- Owner-occupiers may qualify for a special deduction/relief.
Computing the gain
The gain is the sale price minus your basis (acquisition cost, allocated between land and building) minus selling expenses like brokerage. Importantly, the building basis is reduced by the depreciation you took (or should have taken) while renting, which can make the taxable gain larger than expected. Holding-period rules split gains into higher-rate short-term and lower-rate long-term.
Owner-occupier relief
If you sold your own home, special measures — such as a substantial deduction for a principal residence — may reduce or eliminate the tax, subject to conditions. Gather the purchase contract, land/building allocation, acquisition costs, improvement and depreciation history, sale contract, brokerage fees, and evidence of residential use. Old properties with missing cost records often need a professional.
Who this is for
- People selling a home or rental
- Investors realizing a gain
What this is not
- Ongoing rental income (separate)
- Prior depreciation reduces your basis and increases the taxable gain — do not overlook it.
Frequently asked questions
Do I need to file a tax return in Japan?
Many employees do not, because tax is settled by year-end adjustment (年末調整). You generally must file (確定申告) if you have side income over ¥200,000, two or more employers, self-employment income, sizeable investment or crypto gains, or you want to claim deductions like large medical costs or a first-year mortgage credit. Filing season is Feb 16 – Mar 15 via e-Tax. When unsure, check the NTA guidance or ask a 税理士.