Costs and Taxes
Welcome to our guide on taxes and costs related to acquiring real estate in Japan.
This page provides a comprehensive list of the fees and taxes associated with property ownership, including when they are typically paid when completing your purchase.
Whether you're a seasoned investor or a first-time buyer, understanding these financial obligations is essential. Let's explore the key expenses you may encounter along your real estate journey in Japan.
Contract Conclusion
| Costs & Taxes | Remarks |
|---|---|
Cost & Fee Earnest Money Deposit (10%) |
Typically 10% of the property price |
Cost & Fee Agent Commission |
First half of total amount ※Applicable on brokerage properties only. ≫about brokerage/transaction terms |
Cost & Fee Solicitor or Attorney Fee |
Varies |
Cost & Fee Contract Translation Charge* |
Varies |
Tax Stamp Duty |
For Sale and Purchase contract (ex: 10,000JPY for a property less than 50,000,000 JPY) ※Applicable on paper contract only. |
Tax Registration Tax |
Typically included in the Solicitor/Attorney fee. (i.e. The Solicitor/Attorney will pay the tax on your behalf) |
*Optional
Closing
| Costs & Taxes | Remarks |
|---|---|
Cost & Fee Remaining Balance of the Property Cost (90%) |
Must be paid on/before the closing date |
Cost & Fee Agent Commission |
Second half of total amount ※Applicable on brokerage properties only. ≫about brokerage/transaction terms |
Tax Reimbursement of Fixed Asset Tax and City Planning Tax |
Per-diem reimbursement of the annual Fixed Asset Tax and City Planning Tax to the seller, settlement will be counted from the closing date to the end of the fiscal year (31st March). ≫read more |
After Closing
| Costs & Taxes | Remarks |
|---|---|
Tax Real Estate Acquisition Tax |
<For residential use> Land: 1.5% of assessed value Building: 3% of assessed value <Others> Land: 3% of assessed value Building: 4% of assessed value ※Bill will be issued in 3-6 months after title transfer. |
Annual Costs and Taxes
| Costs & Taxes | Remarks |
|---|---|
Tax Fixed Asset Tax and City Planning Tax |
Fixed Asset Tax: 1.4% of assessed value City Planning Tax: 0.3% of assessed value * Imposed by Fiscal Authority of Kyoto City. * Tax reduction available for residential lands. ≫read more |
Cost & Fee Fire Insurance Premium* |
Varies depending on insurance conditions |
Cost & Fee Neighborhood Association Fee* |
Varies depending on the association |
*Optional
- Fixed Asset Tax and City Planning Tax
- Property owners are required to pay Fixed Asset Tax and City Planning Tax, which are levied on fixed assets such as land and buildings. The taxpayer (the one who will be liable for paying tax) will be determined on January 1st, and the taxation period will start from April 1st of the same year to March 31th in the following year. Buyers must reimburse a pro rata amount of the annual tax to the seller upon closing the contract. If the hand over date is between January 1st and March 31th, the buyer must pay the seller, the same amount as the current annual tax as an advance payment for the following year. The seller will pay the tax on behalf of the buyer upon receiving a tax statement. However, even if the imposed tax is set at a higher/lower rate than the amount paid in advance, neither party is required to make up for the difference.
- Agent Commission
- Properties are sorted into 3 groups by the transaction forms.
- Seller is Hachise, no Broker
- Seller is Hachise, Broker is designated
- Seller is others, Broker is Hachise
- Tax Administrator
- The Tax Authority requires non-residents who own real estate in Japan to appoint a resident as their tax administrator. You may appoint your friends or acquaintances living in Japan or we can also introduce an administrator to you.
