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Buying property in Japan involves multiple taxes and fees that can significantly impact your total investment cost. Understanding these expenses upfront is crucial for accurate budgeting and avoiding unexpected financial surprises during the transaction process.
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Japan property taxes and fees typically range from 8-12% of the purchase price, including consumption tax, registration fees, agent commissions, and various administrative costs.
Annual ownership costs include Fixed Asset Tax (1.4% of assessed value) and City Planning Tax (up to 0.3%), plus ongoing building management and maintenance fees for condominiums.
| Tax/Fee Category | Rate/Amount | When Due |
|---|---|---|
| Consumption Tax | 10% of building price (new properties from companies) | At closing |
| Revenue Stamp Duty | ¥10,000-¥60,000 (based on purchase price) | Contract signing |
| Registration Tax | Land: 1.5%, Building: 2% of assessed value | At closing |
| Real Estate Acquisition Tax | 3% of assessed value (residential) | 3-6 months after purchase |
| Agent Commission | (3% of price + ¥60,000) + 10% tax | At closing |
| Fixed Asset Tax | 1.4% of assessed value annually | April-June billing |
| City Planning Tax | Up to 0.3% of assessed value annually | April-June billing |
What property details do I need to determine my exact tax burden in Japan?
Your exact tax calculations depend on five critical property details that must be specified before any accurate cost assessment.
The property location determines your local tax rates, as different prefectures and municipalities apply varying rates for City Planning Tax (ranging from 0% to 0.3% of assessed value). Tokyo properties face the full 0.3% rate, while some rural areas may have no City Planning Tax at all.
Property type significantly affects your tax burden because new condominiums from developers include 10% consumption tax on the building portion, while used properties sold by individuals are exempt from consumption tax entirely. Land purchases never include consumption tax regardless of the seller type.
The property size in square meters determines potential reductions for Real Estate Acquisition Tax, where residential properties under certain floor area thresholds may qualify for substantial deductions from the standard 3% rate.
The agreed purchase price in yen establishes the baseline for percentage-based calculations including agent commission (3% + ¥60,000 + tax), revenue stamp duty brackets (¥10,000 for ¥10-50M transactions), and consumption tax on new buildings (10% of building portion).
How do assessed values compare to purchase prices for tax calculations?
Municipality assessed values typically represent 60-80% of market purchase price for land and 50-70% for buildings, with these ratios varying significantly by location and property age.
The municipality issues annual "Kakaku Shomeisho" tax notices showing separate assessed values for land and building portions. These assessed values, not your purchase price, determine your annual Fixed Asset Tax and City Planning Tax obligations.
Land assessed values generally range from 60-80% of market value, with prime Tokyo locations often hitting the higher end of this range due to more frequent reassessment cycles. Rural properties may have assessed values closer to 50-60% of actual market value.
Building assessed values start lower at 50-70% of construction or market value and depreciate annually based on statutory depreciation schedules. Newer buildings maintain higher assessment ratios, while properties over 20 years old may have assessed values as low as 30-40% of original construction cost.
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When does consumption tax apply to my property purchase?
Consumption tax at 10% applies only to the building portion when purchasing from companies, not individuals, and never applies to land regardless of seller type.
| Seller Type | Property Type | Consumption Tax |
|---|---|---|
| Company/Developer | New building/condo | 10% on full building price |
| Company/Developer | Used building | 10% on building portion only |
| Company/Developer | Land only | 0% (land exempt) |
| Individual owner | Any property type | 0% (individuals exempt) |
| Any seller | Land portion of any sale | 0% (land always exempt) |
New condominiums purchased directly from developers represent the highest consumption tax burden, as the entire building purchase price faces the 10% tax. For a ¥50,000,000 new condo building, consumption tax adds ¥5,000,000 to your total cost.
Used property sales between individuals completely avoid consumption tax, making individual-to-individual transactions significantly more cost-effective than developer purchases for the same property value.
Which revenue stamp bracket applies to my purchase contract?
Revenue stamp duty follows fixed brackets based on your total contract amount, with stamps physically affixed to your purchase agreement at contract signing.
The stamp duty brackets for property purchases are: ¥10,000 for contracts from ¥10-50 million, ¥30,000 for ¥50-100 million, and ¥60,000 for ¥100-500 million. Contracts below ¥10 million pay lower amounts, while those exceeding ¥500 million face higher brackets.
For an ¥85,000,000 property purchase, you fall into the ¥50-100 million bracket and pay exactly ¥30,000 in revenue stamp duty. This amount is fixed regardless of whether your contract is ¥50,000,001 or ¥99,999,999.
Revenue stamps must be purchased from post offices or designated dealers and physically attached to both copies of your purchase contract before signing. Some real estate agencies handle this process, but buyers should verify the correct amount was applied.
What are the exact registration and license tax amounts?
Registration taxes apply to both property transfer and mortgage registration, calculated using statutory rates multiplied by assessed values, not purchase prices.
Land transfer registration tax is typically 1.5% of the land's assessed value, while building transfer tax is 2% of the building's assessed value. These rates apply to the municipality's assessed values from your annual tax notice, which are usually 60-80% of purchase price.
Mortgage registration tax is 0.4% of your loan amount, not the property value. For a ¥50,000,000 mortgage, registration tax is ¥200,000 regardless of the property's assessed value or purchase price.
A complete example: Land assessed at ¥30,000,000 (1.5% = ¥450,000), building assessed at ¥40,000,000 (2% = ¥800,000), plus mortgage of ¥50,000,000 (0.4% = ¥200,000) totals ¥1,450,000 in registration taxes.
As of September 2025, these rates remain current under Japan's statutory tax schedule, though periodic reviews may adjust rates for future transactions.
How much Real Estate Acquisition Tax will I pay and when?
Real Estate Acquisition Tax is a one-time levy charged 3-6 months after your purchase completion, calculated at 3% of assessed value for residential properties with potential reductions.
The standard rate is 4% but reduces to 3% for residential land and buildings. Additional reductions may apply based on floor area thresholds, new construction status, or first-time buyer qualifications depending on your specific municipality.
Using assessed values, not purchase prices: if your building is assessed at ¥40,000,000 and land at ¥30,000,000, your base acquisition tax is ¥1,200,000 for the building plus ¥900,000 for land, totaling ¥2,100,000.
The billing timeline varies by prefecture but typically arrives 3-6 months after your property registration is completed. Some municipalities bill semi-annually, allowing payment in two installments rather than a lump sum.
Floor area reductions can substantially decrease your tax burden: residential properties under specific size limits may qualify for deductions of several hundred thousand yen from the calculated amount.
What is my agent's commission using the standard formula?
Agent commission in Japan follows the statutory maximum formula: (3% of purchase price + ¥60,000) plus 10% consumption tax, due at closing.
For an ¥85,000,000 property: (¥85,000,000 × 0.03) + ¥60,000 = ¥2,550,000 + ¥60,000 = ¥2,610,000 base commission. Adding 10% consumption tax (¥261,000) brings the total to ¥2,871,000.
The ¥60,000 fixed amount applies regardless of property price, making it proportionally more significant for lower-priced properties. For a ¥20,000,000 property, this fixed amount represents a larger percentage of the total commission.
Commission is typically split between buying and selling agents if different agencies represent each party. However, if one agency represents both buyer and seller, they collect the full commission amount from both parties.
Payment timing is at final closing when ownership transfers. Some agencies request partial payment at contract signing, but the majority is due when you receive property keys and complete registration.
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What specific closing fees will I be charged at settlement?
Closing fees in Japan include judicial scrivener costs, notary fees, registration processing, and property appraisals, with most expenses falling on the buyer.
Judicial scrivener fees range from ¥50,000-¥100,000 for handling ownership registration transfer. This professional prepares and submits all legal documents to complete the property ownership change and is always paid by the buyer.
Notary services are typically required only for corporate transactions or complex ownership structures, costing ¥30,000-¥50,000 when needed. Individual property purchases rarely require notary involvement beyond standard contract witnessing.
Property appraisal fees of ¥50,000-¥150,000 may be required by mortgage lenders but are optional for cash purchases. Some sellers agree to split appraisal costs during contract negotiation, though buyers typically bear this expense.
Additional administrative fees include title search costs (¥10,000-¥20,000), document preparation by real estate agencies (¥20,000-¥50,000), and various municipal filing fees totaling ¥5,000-¥15,000 depending on property location.
What are all mortgage-related costs and fees?
Mortgage costs in Japan include origination fees, guarantee insurance, property valuation, and mortgage registration tax, typically totaling 2-4% of your loan amount.
1. Origination fees range from 0-2% of loan principal, varying significantly between lenders. Some banks waive these fees for high-value clients or promotional periods.2. Guarantee fee or mortgage insurance typically costs 2-3% of the loan amount, paid upfront or financed into the mortgage. This protects the lender if you default on payments.3. Property valuation costs ¥30,000-¥50,000 and is always required by lenders before loan approval, regardless of whether you previously obtained an appraisal.4. Mortgage registration tax at 0.4% of loan amount (¥200,000 for a ¥50,000,000 mortgage) covers legal registration of the lender's security interest.5. Administrative processing fees of ¥50,000-¥100,000 cover loan documentation, credit checks, and bank processing costs.Total mortgage costs for a ¥50,000,000 loan typically range from ¥1,500,000-¥2,500,000, representing 3-5% of the loan amount across all fees and charges.
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What annual ownership taxes will I pay each year?
Annual ownership taxes in Japan consist of Fixed Asset Tax at approximately 1.4% of assessed value and City Planning Tax up to 0.3% of assessed value, billed together each April-June.
Fixed Asset Tax is levied by all municipalities at a standard rate of 1.4% of the property's assessed value. For a building assessed at ¥40,000,000, annual Fixed Asset Tax is ¥560,000. This rate is consistent nationwide with rare municipal variations.
City Planning Tax varies by location from 0% to 0.3% of assessed value. Tokyo applies the full 0.3% rate, adding ¥120,000 annually for a ¥40,000,000 assessed property. Some rural municipalities impose no City Planning Tax.
Both land and building portions are taxed separately using their individual assessed values. If land is assessed at ¥30,000,000 and building at ¥40,000,000, total assessed value is ¥70,000,000 for tax calculation purposes.
Tax bills arrive in April or June with payment typically due by June 30th annually. Most municipalities offer quarterly payment options spreading the annual amount over four installments.
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What recurring monthly and annual ownership costs should I budget?
Recurring ownership costs for Japanese properties include management fees, repair reserves, insurance, and parking, with condominium owners facing the highest monthly expenses.
| Cost Category | Monthly Range | Annual Range |
|---|---|---|
| Management Fee (condos) | ¥15,000-¥30,000 | ¥180,000-¥360,000 |
| Repair Reserve (condos) | ¥10,000-¥25,000 | ¥120,000-¥300,000 |
| Property Insurance | ¥3,000-¥7,000 | ¥36,000-¥84,000 |
| Parking Space | ¥10,000-¥50,000 | ¥120,000-¥600,000 |
| Total (with parking) | ¥38,000-¥112,000 | ¥456,000-¥1,344,000 |
Management fees for condominiums cover common area maintenance, security, cleaning, and building administration. Luxury properties or buildings with extensive amenities command higher monthly fees toward the ¥30,000 upper range.
Repair reserve funds accumulate monthly to cover major building maintenance like roof repairs, elevator replacement, or exterior painting. These mandatory contributions increase with building age and expected maintenance cycles.
Over 10 years, total recurring costs range from ¥4,560,000-¥13,440,000 depending on property type and location. Parking spaces in central Tokyo can significantly increase these projections, sometimes doubling total monthly expenses.
What will my selling costs and capital gains tax be when I sell?
Selling costs include agent commission, stamp duties, and registration fees, while capital gains tax ranges from 15-30% depending on holding period and profit amount.
Agent commission follows the same formula as purchase: (3% of sale price + ¥60,000) + 10% tax. For a ¥90,000,000 sale: (¥2,700,000 + ¥60,000) + ¥276,000 tax = ¥3,036,000 total commission.
Stamp duty applies based on sale price brackets, typically ¥30,000 for sales between ¥50-100 million. Registration fees for ownership transfer removal cost approximately ¥10,000-¥20,000 depending on municipality.
Capital gains tax rates depend on holding period: properties held over 5 years qualify for long-term rates of approximately 15% national plus 5% local inhabitant tax (20% total). Properties held under 5 years face short-term rates around 30% national plus 9% local (39% total).
Capital gains are calculated as sale price minus original purchase price minus associated costs (both buying and selling). For a property bought at ¥85,000,000 and sold at ¥90,000,000 after 6 years, with ¥6,000,000 total transaction costs, taxable gain is -¥1,000,000 (no tax due).
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Japanese property taxes and fees require careful planning as they can add 8-12% to your total purchase cost, with ongoing annual obligations continuing throughout ownership.
Understanding these costs upfront helps you budget accurately and avoid financial surprises that could impact your investment returns or cash flow projections.
Sources
- Real Estate Tokyo - Property Buying Guide
- Wise - Buying Property in Japan
- Shiki Real Estate - Foreigner Property Guide
- Mailmate - Japan Property Tax Guide
- Argentum Wealth - 9 Steps to Buy Property
- Wagaya Japan - Property Purchase Journal
- Dovetail - Foreigner Home Buying Guide
- JETRO - Investment Guide