Real Estate Tax in Japan: An Easy, Quickstart Guide

Real estate tax in Japan (不動産税, fudosan zei) is not a single tax but a collection of property-related taxes levied at different stages of owning real estate.

There are four main Japan property taxes to understand:

• property acquisition tax (不動産取得税), paid once when you buy

• fixed asset tax (固定資産税), paid annually during ownership

• city planning tax (都市計画税), an annual tax for properties in designated urban zones

• inheritance tax (相続税, sozokuzei), paid once when you receive property as an heir

This guide covers each tax type, the current rates, how assessed value is calculated, the applicable deadlines, and what non-resident foreign property owners need to know about paying real estate taxes in Japan from abroad.

1. Property acquisition tax (不動産取得税)

Property acquisition tax in Japan is a one-time tax levied when you purchase any property in Japan, including the purchase of land and/or buildings.

This Property Acquisition Tax consists of two parts: touroku menkyozei (登録免許税 =とうろくめんきょぜい) and fudosan shutokuzei (不動産取得税 = ふどうさんしゅとくぜい).

Subsequently, your tax bills are also paid in in two parts:

• Part 1. Touroku menkyozei, registration and license tax, is paid as a revenue stamp that is affixed to the property purchase contract.

• Part 2. Fudosan shutokuzei is a tax bill sent to you by the Legal Bureau where your property is registered (aka registration tax).

How much does property acquisition tax cost?

The calculations for real estate acquisition tax are as follows:

For residential property (reduced rate, effective until March 31, 2027):

• Residential land: (Land assessed value) × 1/2 × 3%

• Residential building: (Building assessed value) × 3%

For non-residential property (standard rate):

• Land or building assessed value × 4%

The assessed value used for the calculation is the fixed asset tax assessed value (固定資産税評価額), which is typically 60–70% of market value, not the purchase price. Most foreign buyers purchasing residential property will pay at the 3% reduced rate.

How is property acquisition tax paid in Japan?

If you are working with a real estate company or agent, they will typically prepare the touroku menkyozei, registration and license tax stamp duty, and include the amount in your fees to them.

The fudosan shutokuzei tax bill is a physical bill from the Legal Bureau, which is sent to your newly registered property 3-4 months after the change in property ownership has been recorded.

For property owners who are not living in Japan, MailMate can provide a bill pay service allowing you to take care of the acquisition tax without needing to be physically present at your property in Japan.

Additional one-time taxes at purchase: consumption tax and stamp duty

Two additional one-time taxes apply at the point of purchase.

• Consumption tax (消費税, shohizei): A 10% consumption tax applies to the building portion of newly built properties purchased from a real estate company or developer. Land is not subject to consumption tax. Individual-to-individual resale transactions are generally exempt. This means if you purchase a new condominium from a developer for ¥50 million, and the building is assessed at ¥30 million, you would pay ¥3 million in consumption tax on the building portion.

• Stamp duty (印紙税, inshizei): Revenue stamp tax is levied on the property purchase contract. The amount depends on the contract value and ranges from ¥10,000 for contracts between ¥5 million and ¥10 million, up to ¥480,000 for contracts over ¥5 billion. Reduced stamp duty rates apply to real estate contracts executed through March 31, 2027.

2. Taxes for owning property in Japan (固定資産税 / 都市計画税)

If you own property in Japan (land and/or buildings), you are subject to fixed asset tax and city planning tax (if your property is within designated urban areas).

In Japanese, fixed asset tax is called kotei shinsanzei (固定資産税 = こていしさんぜい). City planning tax is called toshi keikakuzei (都市計画税 = toshi keikakuzei).

How much does fixed asset tax / city planning tax cost in Japan?

Fixed asset tax is calcuated at a standard tax rate of 1.4% of your land/building's assessed value. And city planning tax has a tax rate of 0.3% of assessed land/building value.

Land value is based on the size of the land and building value is based on the date of construction.

Check out MailMate's property tax calculator here.

How do I pay fixed asset tax / city planning tax in Japan?

Your fixed asset tax bill is sent once a year to your property in Japan. Typically, this bill can be paid at a Japanese city office, post office, or convenience store.

Some regions have begun to digitize bill payment processes, but the standard up till now is paying via cash at a counter.

City planning tax only applies if your property is within a designated urban planning zone. If your property is in a designated urban planning zone, the city planning tax bill will be sent once per year, typically combined with your fixed asset tax bill. It can be paid in up to four installments at a local city office, post office, or convenience store.

This bill is also generally paid at a local city office counter, post office counter, or convenience store.

For those living outside of Japan, consider using MailMate as your bill pay service to help you seamlessly pay your property tax bills from abroad.

3. Taxes when selling real estate (所得税/住民税)

As with any other income generated within Japan, you must report profits when selling real estate property (whether a land or building).

The income you generate from selling your property will then be subject to income tax, shotokuzei (所得税 = しょとくぜい), and residence tax, jyuminzei (住民税 = じゅうみんぜい).

What is the tax rate on income generated by selling real estate in Japan?

The tax rate applied to selling real estate in Japan is calculated based on the years you have owned the property.

If you have owned the property for over 5 years as of January 1 of the year of sale, long-term capital gains are taxed at a total flat rate of 20.315%, broken down as: 15.315% national income tax (which includes a 0.315% Reconstruction Special Income Tax surtax) and 5% local resident tax.

If you have owned the property for five years or fewer as of January 1 of the year of sale, short-term capital gains are taxed at a total flat rate of 39.63%: 30.63% national income tax and 9% local resident tax.

Note that the 5-year ownership period is measured as of January 1 of the sale year, not from the actual date of sale. A property purchased in June 2019 and sold in September 2025 would be treated as short-term (only 6 years since 2019, but as of January 1, 2025 the holding period is less than 6 years), while the same property sold in 2026 would qualify as long-term.

Additionally, if you are selling your primary residence in Japan, you may be eligible to exclude up to ¥30 million of capital gains from taxation regardless of the holding period.

How do I pay taxes on my real estate sale in Japan?

Taxes on your real estate sale should be filed in an income tax return that you submit prior to March 15 of the following calendar year.

For example, if you sold a property in May 2024 at a profit, you would file a capital gains income tax return between February 16 and March 15, 2025.

Non-resident sellers should note that the buyer is required to withhold 10.21% of the gross sale price and remit it to the tax office at the time of sale, which is then credited against your final capital gains tax liability when you file your return.

4. Taxes when inheriting real estate in Japan

If you inherit a property in Japan, you will be subject to a one-time inheritance tax.

Inheritance tax in Japan is called sozokuzei (相続税 = そうぞくぜい). Note that 贈与税 (zoyozei) is the gift tax, a separate tax that applies when property is gifted between living individuals rather than inherited from a deceased person.

How much is inheritance tax on real estate in Japan?

The cost of inheritance tax on real estate in Japan is calculated based on the assessed road value for land and the fixed asset tax assessment value for buildings.

There are various deductions that can be claimed to help mitigate the inheritance tax cost, so it would be best to consult with an accountant who can make sure you are taking advantage of possible exemptions for inherited personal property.

Some deductions and exemptions include the following:

• Basic exemption: ¥30 million + ¥6 million × number of statutory heirs. If the total estate value is below this threshold, no inheritance tax applies and no filing is required.

• Spousal exemption: A surviving spouse pays no inheritance tax on amounts up to the greater of: (1) their statutory share of the estate (typically 50%), or (2) ¥160 million.

• Donation of residential property: A spouse with a marriage period of 20 years or more can receive a residential property with a tax exemption of up to 20 million yen.

• Life insurance and retirement benefit exemptions: ¥5 million × number of statutory heirs applies to each category.

• Gift lookback rule (2023 reform): Gifts made within 7 years before the date of death are added back into the taxable estate, with a ¥1 million deduction for gifts made in years 4–7.

• Negative asset deduction: Outstanding mortgages, debts, and funeral expenses can be deducted from the total estate value before calculating tax.

How do I pay inheritance tax on my property in Japan?

Inheritance tax must be paid within 10 months from the day after you learned that the deceased had died.

Your inheritance tax return can be submitted to a Japanese tax office via e-Tax (electronic filing), by mail or express delivery, or by dropping them off in-person to a tax office counter or in a tax office's after-hours collection box.

The National Tax Agency warns that if you do not file within the 10 month period, you may be subject to additional taxes and late payment penalties in addition to the original tax.

The following methods are accepted forms of payment for inheritance tax:

1. Electronic tax payment

2. Credit card payment

3. Payment at a financial institution or tax office

For more information on real estate inheritance tax, please see the National Tax Agency guide and consult with your accountant.

Frequently asked questions

What are the main types of real estate tax in Japan?

There are four main real estate taxes in Japan. Property acquisition tax (不動産取得税, fudosan shutokuzei) is a one-time tax paid when purchasing land or buildings, at 3% of the assessed value for residential property (reduced rate until March 31, 2027) or 4% for non-residential property. Fixed asset tax (固定資産税, kotei shisanzei) is an annual tax of 1.4% of the property's assessed value, levied each January 1. City planning tax (都市計画税, toshi keikakuzei) is an additional annual tax of up to 0.3% for properties in designated urban planning zones. Inheritance tax (相続税, sozokuzei) is a one-time tax paid within 10 months when receiving property through inheritance.

What is the withholding tax on real estate in Japan?

Withholding tax on real estate in Japan applies to non-residents and foreign corporations. When a non-resident sells Japanese real estate, the buyer must withhold 10.21% of the gross sale price and remit it to the Japanese tax office by the 10th day of the following month. This withholding is credited against the seller's final capital gains tax liability when they file a return. Exceptions apply when the purchase price is under ¥100 million and the buyer intends to use the property as their own primary residence. For rental income, non-residents are subject to a 20.42% withholding tax on gross rental income.

What is the capital gains tax rate on real estate in Japan?

Capital gains tax on the sale of real estate in Japan is calculated based on the holding period, measured as of January 1 of the year of sale. For properties held for more than 5 years (long-term capital gains), the total tax rate is 20.315%: 15.315% national income tax (including the 0.315% Reconstruction Special Income Tax surtax) plus 5% local resident tax. For properties held for 5 years or fewer (short-term capital gains), the total rate is 39.63%: 30.63% national income tax plus 9% local resident tax. Sellers of a primary residence may exclude up to ¥30 million of capital gains from taxation regardless of holding period.

How is fixed asset tax assessed in Japan?

Fixed asset tax in Japan is assessed annually on January 1 by the municipal government. The tax base is the fixed asset tax assessed value (固定資産税評価額), which is typically 60–70% of the property's fair market value and is reassessed every three years. The standard tax rate is 1.4% of this assessed value. For new residential buildings, the fixed asset tax on the building portion is reduced by 50% for the first 3 years (5 years for condominiums). The assessed value for land is also reduced for residential use: plots up to 200 square meters are assessed at one-sixth of the standard value.

Does Japan have an estate tax or gift tax?

Japan does not have an estate tax in the Western sense. Instead, Japan imposes an inheritance tax (相続税, sozokuzei) on each individual heir based on their share of the inherited assets. The basic exemption is ¥30 million plus ¥6 million per statutory heir. If the total estate value is below this threshold, no inheritance tax is owed and no filing is required. Japan also has a separate gift tax (贈与税, zoyozei), which applies to gifts of property between living individuals. The annual basic deduction for gift tax is ¥1.1 million per recipient. Gifts made within 7 years before the date of death are generally added back into the taxable estate under the 2023 gift lookback reform.

How do non-residents pay property taxes in Japan?

Non-resident property owners in Japan receive physical tax bills at their Japanese property address. Fixed asset tax and city planning tax bills are sent annually to the property. These bills can be paid at a Japanese city office, post office, or convenience store. Non-residents not based in Japan must appoint a domestic contact person (国内管理人, kokunai kanrinin) to serve as their legal representative for local government purposes. A bilingual tax representative service such as MailMate can receive property tax bills, provide English-language summaries, and pay bills on the property owner's behalf without requiring the owner to be present in Japan.

What is the difference between fixed asset tax and city planning tax in Japan?

Fixed asset tax (固定資産税, kotei shisanzei) is an annual tax of 1.4% of the assessed value of all land and buildings in Japan, assessed by the municipal government each January 1. City planning tax (都市計画税, toshi keikakuzei) is an additional annual tax of up to 0.3% of the assessed value that applies only to properties located within designated urban planning zones. If your property is outside an urban planning zone, you pay only fixed asset tax. Both taxes are typically billed together in one annual notice and can be paid in up to four installments.

In closing

If you are a real estate investor interested in Japan's real estate market, or if you are thinking about buying a second home in Japan, it's essential to understand Japan's property taxes to comply with the country's tax laws.

MailMate's fluently bilingual tax representative service helps non-resident buyers stay on top of property tax bills by serving as a liaison between property owners and the local government.

Navigate Japan's tax system with an experienced tax representative service tailored for foreign property owners.