List of Taxes Related to Real Estate
※ Resident tax is not imposed on non-resident
* Resident tax is not imposed on non-resident
The tax is imposed when real estate is acquired.
In principle, Tax amount = Assessed Value of fixed assets ×４％
Under special provision: 3% (for land and residential buildings) and 4% (for non-residential buildings)
When land and buildings are constructed or bought, registration and license taxes are imposed mainly for registration of preservation and relocation of ownership. The following tax rates are levied against the assessed value of fixed assets.
Registration of land ownership: 1.5％ (up to Mar. 31, 2021 ※standard rate is 2％), Registration of building ownership: 2％.
The amount of stamp tax to be paid depends on the property price listed on the purchase agreement.
When buying real estate, a 10% consumption tax will be levied on the purchase price. Since the land is tax-exempt, there is no consumption tax for a land purchase, but the building is subject to consumption tax.
※If the transaction is taxable, such as the purchase of newly constructed building or brokerage fee, consumption tax will be levied.
※ For non-taxable transactions, such as purchasing a pre-owned home by an individual from an individual, the transaction is not subject to consumption tax.
・Buyers will pay taxes proportionally when transaction is made
As mentioned above, fixed asset tax and city planning tax are imposed on owners of real estate as of January 1st of the year. However, most transactions take place during the calendar year. In this case, buyers usually pay the proportion of the fixed asset tax and city planning tax corresponding to the time the new buyer will own the property in the year to the sellers. Hence, these taxes are incurred when real estate is purchased as well.
Owners of land, a house, and depreciable assets as of January 1st every year will be imposed yearly.
In principle, Tax amount = assessed value of fixed assets x 1.4%.
The tax rate is decided by each municipal tax offices, which varies from areas.
Owners of land, a house, and depreciable assets as of January 1st every year will be imposed yearly.
In principle, Tax amount = assessed value of fixed assets x 0.3% (Maximum).
The tax rate is decided by each municipal tax offices, which varies from areas.
・Buyers will pay taxes proportionally when transaction is made.
As mentioned above, fixed asset tax and city planning tax are imposed on owners of real estate as of January 1st of the year. However, most transactions take place during the calendar year. In this case, buyers usually pay the proportion of the fixed asset tax and city planning tax corresponding to the time the new buyer will own the property in the year to the sellers. Hence, these taxes are incurred when real estate is purchased as well.
It is a tax levied on personal income. The calculation is to subtract all expenses and deductions from the income of the year to get the profit, and then multiply it by the corresponding tax rate.
| Personal Income Tax Rates | ||
| Taxable Income | Tax Rate | Progressive difference |
| less than 1.95 million yen | 5% | 0 yen |
| 1.95 to 3.3 million yen | 10% | 97,500 yen |
| 3.3 to 6.95 million yen | 20% | 427,500 yen |
| 6.95 to 9 million yen | 23% | 636,000 yen |
| 9 to 18 million yen | 33% | 1,536,000 yen |
| 18 to 40 million yen | 40% | 2,796,000 yen |
| more than 40 million yen | 45% | 4,796,000 yen |
| ※ The above rate is in accordance with the law effected on Apr. 1, 2020 | ||
| ※ A 2.1 % restoration income surtax will also be levied on the amount of the income tax from 2013 to 2037 | ||
・When a non-resident leases real estate, if certain conditions are met, the lessee of the real estate is obligated to withhold 20.42% of the monthly rent and pay it to the tax office.
(e.g., if the tenant is a corporation, it is not for residential use, the amount exceeds 100 million yen, etc.)
It is a tax levied when the capital gain is realized on the sale of a property. The amount of capital gains that is taxable is calculated by using the amount that you receive from the buyer of the real estate property after deducting both the acquisition costs and transfer expenses. The applicable tax rates are as follows:
| Held not more than 5 years (short-term capital gain) |
Income tax 30％ Resident tax 9％ (not imposed on non-resident) |
|---|---|
| Held more than 5 years (long-term capital gain) |
Income tax: 15％ Resident tax: 5％ (not imposed on non-resident) |
| A special provision for self-owned houses held for more than 10 years (For resident of Japan only) For the amount of capital income under 60 million yen |
Income tax: 10％ Resident tax: 4％ ※The holding period is calculated by counting the time between the date you purchased your property and January 1st of the year you sell your property. |
Held not more than 5 years
(short-term capital gain)
Income tax 30％
Resident tax 9％ (not imposed on non-resident)
Held more than 5 years
(long-term capital gain)
Income tax: 15％
Resident tax: 5％ (not imposed on non-resident)
A special provision for self-owned houses held for more than 10 years
(For resident of Japan only)
For the amount of capital income under 60 million yen
Income tax: 10％
Resident tax: 4％
※The holding period is calculated by counting the time between the date you purchased your property and January 1st of the year you sell your property.
The amount of stamp tax to be paid depends on the property price listed on the purchase agreement.
・For fully-taxed large business : A 10% consumption tax will be levied when selling buildings.
・For tax-exempt small business: No consumption tax is imposed.
※ Basically, individuals do not incur consumption tax when selling personal real estate.
・When a non-resident sells real estate, if certain conditions are met, the buyer of the real estate is obligated to withhold 10.21% of the sale price of the property and pay it to the tax office. (e.g., if the buyer is a corporation, it is not for residential use, the amount exceeds 100 million yen, etc.)
a surtax of reconstruction funding will be levied in addition to the income tax, 2.1% temporary surtax on National income tax is in effect from 2013 to 2037
Gift tax is imposed when one receives properties such as land, a house, or the purchase money for real estate donated by individuals.
■ Calculation of gift tax
Taxable amount = gifted asset value – 1.1 million (basic exemption)
Gift tax = taxable amount × tax rate – exemption
※1 Basic exemption: The gift tax will not be imposed if the total value of properties donated in one year is less than 1.1 million.
※2 Donations between spouses can be exempted under certain circumstances. Meanwhile, special rate is applicable if the beneficiary is 20 years or older and is a direct descendant of the donor.
Inheritance tax is imposed when one acquires properties by inheritance or bequest upon the death of a decedent.
■ Calculation of inheritance tax
Basic exemption = 30 million + (6 million × number of statutory heirs)
Total taxable estate = Net estate amount − basic exemption
Inheritance tax = total taxable estate × tax rate – exemption
■ How is inherited real estate assessed?
Land
Roadside land value method: roadside land prices for inheritance purpose × land size
Multiplying method: assessed value of fixed assets × a certain multiplying rate (※ If roadside land value is not applicable)
House
Assessed Value of fixed assets, which is approximately 70% of the actual value.
| Taxable amount | Tax rate | Exemption |
|---|---|---|
| Up to ¥ 2 million | 10% | - |
| Up to ¥ 4 million | 15% | ¥ 100 thousand |
| Up to ¥ 6 million | 20% | ¥ 300 thousand |
| Up to ¥ 10 million | 30% | ¥ 900 thousand |
| Up to ¥ 15 million | 40% | ¥ 1.9 million |
| Up to ¥ 30 million | 45% | ¥ 2.65 million |
| Up to ¥ 45 million | 50% | ¥ 4.15 million |
| Over ¥ 45 million | 55% | ¥ 6.4 million |
※Special Case
※The beneficiary is 20 years or older and is direct descendant of the donor
| Totaltaxable estate | Tax rate | Excemption |
|---|---|---|
| Up to ¥ 10 million | 10% | - |
| Up to ¥ 30 million | 15% | ¥ 500 thousand |
| Up to ¥ 50 million | 20% | ¥ 2 million |
| Up to ¥ 100 million | 30% | ¥ 7 million |
| Up to ¥ 200 million | 40% | ¥ 17 million |
| Up to ¥ 300 million | 45% | ¥ 27 million |
| Up to ¥ 600 million | 50% | ¥ 42 million |
| Over to ¥ 600 million | 55% | ¥ 72 million |
※ Resident tax is not imposed on non-resident
* Resident tax is not imposed on non-resident
※The above mentioned is for reference only. The actual tax amount varies according to conditions.
※The above mentioned is for taxes imposed in Japan only, excluding taxes levied from your country of residence.
※The above-mentioned taxes change subject to revision of Japanese laws.
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