Property-related taxes in Japan are classified into three categories according to timing.
1. Taxes related to acquisition
Stamp Duty
Payment timing: At signing sales & purchase agreement
Taxable subject | Sales & purchase agreement |
Taxation | 0 - JPY 480,000 depending on Purchase Price |
Registration tax
Payment timing: At payment of 100% of purchase price
Taxable subject - Land | (Taxation value)*x1.5% |
Taxable subject - Building | (Taxation value)*x2.0% |
Real estate acquisition tax
Payment timing: Approx. 6-12 months after the acquisition
Taxable subject - Housing land | (Taxation value)*x1.5% |
Taxable subject - Residential building | (Taxation value)*x3.0% |
* Taxation value is not a purchase price but a value assigned by the authorities for tax calculation purposes.
2. Taxes related to holding
Fixed asset tax
Payment timing: Pay annually or quarterly
Taxable Subject - Land/Building | (Taxation value)*1x1.4% |
City planning tax
Payment timing: Pay annually or quarterly
Taxable Subject - Land/Building | (Taxation value)*x0.3% |
Income tax
Payment timing: At annual tax return
Rent income | (Taxable income)x(5%-45%)**-(Tax deduction)** |
* Taxation value is not a purchase price but a value assigned by the authorities for tax calculation purposes.
** Tax rate and tax deduction for income tax are dependent on the taxable income as follows.
Taxable income | Tax rate | Tax deduction |
0 - JPY1,950,000 | 5% | - |
JPY1,950,000 - 3,300,000 | 10% | JPY97,500 |
JPY3,300,000 - 6,950,000 | 20% | JPY427,500 |
JPY6,950,000 - 9,000,000 | 23% | JPY636,000 |
JPY9 million -18 million | 33% | JPY1,536,000 |
JPY18 million - 40 million | 40% | JPY2,796,000 |
JPY40 million over | 45% | JPY4,796,000 |
3. Taxes related to disposition
Capital gains tax
Payment timing: At annual tax return
Taxable subject - Capital gains | (Capital gain - expenses)x(15.315% or 30.63%)*** |
*** Capital gains tax for non-resident sellers.
15.315% for disposition after long term (more than 5 years) holding.
30.63% for disposition after short term (less than 5 years) holding.
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