When buying real estate in Japan, many of the taxes are based on the fixed asset value of the individual property, which is different to the purchase price. If you have narrowed down your search to a few properties, your agent should be able to provide you with a general estimate of the taxes and costs.
In any case, plan for the fees and taxes to be equivalent to around 6~7% on top of the purchase price.
STAMP TAX 5,000-60,000 YEN +
Stamp tax is paid when signing a construction contract, sales contract or mortgage contract. The tax is based on the purchase price.
Purchase Price Stamp Tax* (Reduced rate)
5 ~ 10 million Yen 5,000 Yen
10 ~ 50 million Yen 10,000 Yen
50 ~ 100 million Yen 30,000 Yen
100 ~ 500 million Yen 60,000 Yen
*The stamp tax rates indicated above are the reduced tax rates which applies to transactions that take place between April 1, 2018 and March 31, 2020.
REAL ESTATE REGISTRATION TAX
Land: 1.5% of the fixed asset value
Building*: 0.3% of the fixed asset value
This tax is paid upon transfer of ownership, and also when a mortgage is taken out on a property. A judicial scrivener will provide an estimate of the registration tax that must be paid.
The tax rate is 1.5% of the fixed asset value of the land, plus 0.3% of the value of the building (*if the floor area is over 50 sqm, within a certain age, and used as a personal residence). If the property is to be used as a second home or rented out, the tax rate on the building is 2.0% of the fixed asset value.
Mortgage registration tax is 0.4% of the value of the mortgage. For personal residences that meet certain requirements, the tax rate may be reduced to 0.1%.
REAL ESTATE ACQUISITION TAX
Land: 1.5% of the fixed asset value
Building: 3.0% of the fixed asset value
You will receive a bill for the real estate acquisition tax from the tax office within 6 months after purchase.
– 1.5% of the fixed asset value of the land.
– 3.0% of the fixed asset value of the building.
The normal tax rate for land is 3% of the fixed asset value, but if the land is designated as ‘building land’ the tax rate is halved.
Deductions apply for new housing and housing that has received long-term superior housing certification. There are also deductions for secondhand homes and apartments will which vary depending on the age of the building, its size and purpose of use.
BROKERAGE FEES 3% + 60,000 Yen + Consumption tax
If you are using the services of a real estate agent when buying or selling real estate in Japan, you will be required to pay them a brokerage fee or commission of 3% of the base price + 60,000 Yen + consumption tax (currently 10%).
The base price is the consumption tax-free price of the property and will be lower than the actual purchase price if the property includes consumption tax, so make sure you check that your agent has not overcharged you. Consumption tax applies to the building portion of the property if the seller is a company (the consumption tax is payable by the seller).
FIXED ASSET & CITY TAX
Fixed asset: 1.4% of the base taxation amount
City tax: 0.3% of the base taxation amount
The annual fixed asset and city taxes will be different for each property, so please check with your agent for the latest tax figures. Taxes will be higher for properties with a larger and more valuable share of land ownership.
You will have to pay the pro-rated taxes to the seller at the time of sale, and then continue to pay these taxes to the tax office each year.
Taxes can be paid once annually, or in quarterly payments.