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General Expenses and Taxes for Purchasing Real Estate in Japan

General Expenses and Taxes for Purchasing Real Estate in Japan

Below is a list of the general expenses and taxes associated with real estate transactions in Japan. Please confirm and refer to these when purchasing a property.

Main Expenses when Purchasing Real Estate

  Payee Estimate of costs Notes
Down payment Seller Approximately 5 to 10% of the sales price at the time of the sales contract. This will be applied to the sales price when paying the remaining costs.
Settlement money on fixed asset taxes, etc. Seller Daily pro-rate of annual taxes from the day the property is transferred. This will be calculated starting from April 1st or January 1st.
Registration fee Legal scrivener, etc. Commission for legal scrivener and registry license taxes, etc. Please consult with your broker about arranging a legal scrivener.
Fire insurance premium Insurance company or agency To be determined upon evaluating the building. Please consult with the insurance company or agency for details.
(Housing) Loan fee Banking institution Bank handling fees and insurance premiums, etc. Please consult with the bank or broker for details.
Reserve fund for repairs/Management fees (for apartments, etc.) Seller Daily pro-rate of monthly expenses.  
Brokerage fee Brokerage firm 3.24% of the sales price + ¥64,800 (sales tax included)  
Down payment
Payee Seller
Summary of expenditure Approximately 5 to 10% of the sales price at the time of the sales contract.
Notes This will be applied to the sales price when paying the remaining costs.
Settlement money on fixed asset taxes, etc.
Payee Seller
Summary of expenditure Daily pro-rate of annual taxes from the day the property is transferred.
Notes This will be calculated starting from April 1st or January 1st.
Registration fee
Payee Legal scrivener, etc.
Summary of expenditure Commission for legal scrivener and registry license taxes, etc.
Notes Please consult with your broker about arranging a legal scrivener.
Fire insurance premium
Payee Insurance company or agency
Summary of expenditure To be determined upon evaluating the building.
Notes Please consult with the insurance company or agency for details.
(Housing) Loan fee
Payee Banking institution
Summary of expenditure Bank handling fees and insurance premiums, etc.
Notes Please consult with your bank or broker for details.
Reserve fund for repairs/Settlement money for management fees (for apartments, etc.)
Payee Seller
Summary of expenditure Daily pro-rate of monthly expenses.
Brokerage fee
Payee Brokerage firm
Summary of expenditure 3.24% of the sales price + ¥64,800 (sales tax included)

List of Real Estate Taxes

  Applicable to Tax rate Special provisions Returns/Payments
Stamp duty Transactions/Contract work, Monetary loans, Lease contracts Some transactions and contracts are subject to a reduced tax rate when conditions are met.
Contract amount Original tax rate Reduced tax rate
Over ¥100,000 and up to ¥500,000 ¥400 ¥200
Over ¥500,000 and up to ¥1,000,000 ¥1,000 ¥500
Over ¥1,000,000 and up to ¥5,000,000 ¥2,000 ¥1,000
Over ¥5,000,000 and up to ¥10,000,000 ¥10,000 ¥5,000
Over ¥10,000,000 and up to ¥50,000,000 ¥20,000 ¥10,000
Over ¥50,000,000 and up to ¥100,000,000 ¥60,000 ¥30,000
Over ¥100,000,000 and up to ¥500,000,000 ¥100,000 ¥60,000
Over ¥500,000,000 and up to ¥1,000,000,000 ¥200,000 ¥160,000
Over ¥1,000,000,000 and up to ¥5,000,000,000 ¥400,000 ¥320,000
Over ¥5,000,000,000 ¥600,000 ¥480,000
Payments made by postmark or affixing a stamp
Registry license tax Real estate registry ●Preservation of ownership 0.4%
→ Newly-built home: 0.15% reduction
●Transfer of ownership through sale or purchase (2%)
→ Pre-owned home: 0.3% (1.5% on land) reduction
●Establishment of mortgage 0.4%
→ Newly-built home: 0.1% reduction
→ Pre-owned home: 0.1% reduction
Payment or stamp duty payment
Real estate acquisition tax Acquisition of real estate (purchase, construction, etc.) 4% 3% for land and houses (residential), 4% for houses (non-residential) Must declare within the designated period following acquisition
Fixed asset tax Possession of real estate 1.4% (standard tax rate) Reduction for newly-built homes,
Reduction for residential land
4 payments annually
City planning tax Possession of real estate 0.3% (standard tax rate) Reduction for residential land Lump payment with fixed asset tax
Capital gains tax
(Resident tax)
Sale and acquisition of real estate Separate taxation/Consolidated taxation Special deduction for residential properties, Special provision for new purchases Tax return
Housing transfer loss carryforward Transfer and new purchase of a set residence Refunds/Tax reductions: if a deficit remains after aggregating profits and losses for the first year, this can be carried forward for the following 3 years Tax return
Donation tax Donation of real estate or assets, etc. Donation taxes are subject to a progressive tax rate Special deduction for spouses,
Special provision for tax settlement at the time of inheritance
Must declare between February 1st and March 15th of the following year
Inheritance tax

Acquisition through inheritance of real estate, etc.

Inheritance tax will be levied based on a progressive tax rate for amounts surpassing (¥30,000,000 + ¥6,000,000 × the number of legal heirs) Tax reduction for spouses, Special provision for small-scale housing sites, etc. Must declare and make payment within 10 months from the day following notification of the deceased passing. Special provision for deferred payment
Housing loan deduction Acquisition or renovation of a residence/Loans for land acquired with a residence For general housing: the 10 year, end of year balance of the housing loan × 1% Tax return
Stamp duty
Applicable to Transactions/Contract work, Monetary loans, Lease contracts
Tax rate/Special provisions Some transactions and contracts are subject to a reduced tax rate when conditions are met.
Returns/Payments Payments made by postmark or affixing a stamp
Registry license tax
Applicable to Real estate registry
Tax rate/Special provisions ●Preservation of ownership 0.4%
→ Newly-built home: 0.15% reduction
●Transfer of ownership through sale or purchase (2%)
→ Pre-owned home: 0.3% (1.5% on land) reduction
●Establishment of mortgage 0.4%
→ Newly-built home: 0.1% reduction
→ Pre-owned home: 0.1% reduction
Returns/Payments Payment or stamp duty payment
Real estate acquisition tax
Applicable to Acquisition of real estate (purchase, construction, etc.)
Tax rate 4%
Special provisions 3% for land and houses (residential), 4% for houses (non-residential)
Returns/Payments Must declare within the designated period following acquisition
Fixed asset tax
Applicable to Possession of real estate
Tax rate 1.4% (standard tax rate)
Special provisions Reduction for newly-built homes,Reduction for residential land
Returns/Payments 4 payments annually
City planning tax
Applicable to Possession of real estate
Tax rate 0.3% (standard tax rate)
Special provisions Reduction for residential land
Returns/Payments Lump payment with fixed asset tax
Capital gains tax (Resident tax)
Applicable to Sale and acquisition of real estate
Tax rate Separate taxation/Consolidated taxation
Special provisions Special deduction for residential properties,Special provision for new purchases
Returns/Payments Tax return
Housing transfer loss carryforward
Applicable to Transfer and new purchase of a set residence
Tax rate/Special provisions Refunds/Tax reductions: if a deficit remains after aggregating profits and losses for the first year, this can be carried forward for the following 3 years
Returns/Payments Tax return
Donation tax
Applicable to Donation of real estate or assets, etc.
Tax rate Donation taxes are subject to a progressive tax rate
Special provisions Special deduction for spouses, Special provision for tax settlement at the time of inheritance
Returns/Payments Must declare between February 1st and March 15th of the following year
Inheritance tax
Applicable to Acquisition through inheritance of real estate, etc.
Tax rate Inheritance tax will be levied based on a progressive tax rate for amounts surpassing (¥30,000,000 + ¥6,000,000 × the number of legal heirs)
Special provisions Tax reduction for spouses, Special provision for small-scale housing sites, etc.
Returns/Payments Must declare and make payment within 10 months from the day following notification of the deceased passing. Special provision for deferred payment
Housing loan deduction
Applicable to Acquisition or renovation of a residence/Loans for land acquired with a residence
Tax rate/Special provisions For general housing: the 10 year, end of year balance of the housing loan × 1%
Returns/Payments Tax return

The above tables are based on the current tax structure and laws as of January 1st, 2015. As the information shown may change due to future legal revisions, etc., please consult with an accountant or the competent authorities (local tax office) for the latest information and details.

Learn more about taxes in Japan

To discover more about taxes and how to file your tax returns, etc., please visit the National Tax Agency’s homepage for details National Tax Agency Homepage (English)