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Purchasing a real
estate in Japan requires the following one-time payments. The gross
amount of such costs usually ranges 6 to 8 percent of a purchasing
price. For instance, you will need JPY21.2-21.6M to purchase a
real estate of JPY20M.
| I.
Taxes charged when purchasing (or obtaining) a real property
in Japan |
STAMP
DUTY (National Tax): Tax for a stamp to be affixed
on contracts.
| Price on Contract |
Construction Contract |
Property Sales Contract |
Loan Contract |
| ¥1M to 2M or less |
¥400 |
¥2,000 |
¥2,000 |
| ¥2M to 3M or less |
¥1,000 |
¥2,000 |
¥2,000 |
| ¥3M to 5M or less |
¥2,000 |
¥2,000 |
¥2,000 |
| ¥5M to 10M or less |
¥10,000 |
¥10,000 |
¥10,000 |
| ¥10M to 50M or less |
¥15,000 |
¥15,000 |
¥20,000 |
| ¥50M to 100M or less |
¥45,000 |
¥45,000 |
¥60,000 |
| ¥100M to 500M or less |
¥80,000 |
¥80,000 |
¥100,000 |
| ¥500M to 1B or less |
¥180,000 |
¥180,000 |
¥200,000 |
*Reducing Measures : For sales and construction
contracts concluded by 31 March 2011, an amount above is applicable.
REGISTRY
LICENSE TAX (National Tax): Tax for registering
the setup of ownership or mortgage on a property. Usually separated
in land and building part.
| Category |
Tax Rate*1
(Necessary Registration) |
Reducing Measures*2 |
| New Residence |
Land |
Appraisal Value* x 1% (Reg. of Ownership
Transfer) |
None |
| Building |
Appraisal Value x 0.4% (Reg. of
Ownership Retention) |
x 0.15% |
| Pre-owned
Residence |
Land |
Appraisal Value x 1% (Reg. of Ownership
Transfer) |
None |
| Building |
Appraisal Value x 2% (Reg. of Ownership
Transfer) |
x 0.3% |
| Loan Borrowing |
Loaned Amount x 0.4% (Reg.
of Mortgage Setup) |
x 0.1% |
| *1: |
Tax percentages indicated are reduced from
original rates and will be valid until end of March 2008. |
| *2: |
Reducing rates will be valid until end of
March 2011.
Applicable Condition
| 2-1. |
Floor area of 50 sqm or above |
| 2-2. |
Residences purchased or built by end
of March 2011. |
| 2-3. |
Or residential-commercial complex where
more than 90% of the floor area is used as residence
registered within 1
year since built or purchased |
| 2-4. |
Pre-owned residential property of 20
years or less (25 years or less for properties of fireproof
building) |
| 2-5. |
For a loan in aiming to purchase new
or pre-owned property of above conditions above. |
|
REAL
PROPERTY ACQUISITION TAX (Local Tax): Tax on purchase
of land and/or building, new construction, renovation, or donation.
| |
Tax Rate & Reducing
Measures |
| Building |
When newly building, purchasing or improving
a residential property
Appraisal Value* x 3%
Reducing Measures : (Appraisal Value – Special Deduction
of JPY12M) x 3% |
Case of Pre-owned Residence
Appraisal Value x 3%
Reducing Measures : (Appraisal Value – Deduction Amount
below) x 3%
An amount specified blew can be deducted from the appraisal
value of a property :
| Period
when built |
Deduction
amount |
| 1 April 1976 – 30
June 1981 |
JPY3.5M |
| 1 July 1981 – 30
June 1985 |
JPY4.2M |
| 1 July 1985 – 31
March 1989 |
JPY4.5M |
| 1 April 1989 – 31
March 1997 |
JPY10M |
| 1 April 1997
or afterwards |
JPY12M |
|
Applicable Conditions of Reducing Measures
Case filling all of the followings:
| 1. |
Gross floor area of more than 50 sqm and
not over 240 sqm (To be a certified area) |
| 2. |
Age not over 20 years for wooden-made properties,
and not over 25 years for fireproof properties. |
| 3. |
Purchased as a residence by the purchaser. |
| |
Tax Rate & Reducing
Measures |
| Land |
Appraisal Value* x 50% x 3%
One of a higher amount below can be deducted from the above
tax amount:
| 1. |
¥45,000 |
| 2. |
(Land appraisal value per sqm)
x 50% x {(A : [Floor area in sqm] x 2) or (B : 200 if
A exceeds 200 sqm)} x 3% |
|
Applicable Conditions of Reducing Measures
Case filling any one of the followings:
| 1. |
When a house property is newly built on the
land within 3 years since obtained. |
| 2. |
When the land is obtained within 1 year since
a house property was newly built on it. |
| 3. |
When the land with a house property is obtained,
and the property has never been occupied. |
*Appraisal Value: A value to calculate the fixed property tax on
a property. Usually listed in tax register book. The value is unique
and independent from actual costs to build or purchase the land.
For cases of newly building, improving or making an enlargement to
a property, a new value will be sought by referring to other existing
values in vicinity and approved by a register of the authority. Generally,
50-70% of construction cost for building property and around 70%
of a purchasing price for the land property.
 |
Unlike western
cities, all resale deals in Japan require buyers to pay a government
prescribed agent’s commission to realtors. The legal rate
is 3.15% of a purchased value plus JPY63,000-, inclusive of local
sales tax. To eliminate possible misunderstandings, resulting from
a lack of knowledge about such local remuneration system, we will
clearly explain the responsibilities of parties involved, especially
regarding commission payment due. Payments to realtors are indicated
on a required legal document called ‘Explanation of Important
Matters’. The buyer and realtor must sign and execute the
document before concluding a purchase agreement and this executed
document can be used as evidence of the payment responsibility.
| III.
Annual taxes for retaining a real property |
FIXED
PROPERTY TAX (Local Tax)
A person who owns a property as of 1st January is responsible for
paying the following taxes in the same year. For the year when
a property is transferred, the buying person should pay such taxes
of the year (on a pro-rate basis) to the selling person when purchasing,
and the selling person should pay the gross of such taxes to the
authority.
| |
Tax
Rate & Reducing Measures |
| Land |
Appraisal Value* x
1.4%
Reducing Measures :
- For a land area not over 200 sqm, the appraisal value is
reduced to 1/6.
- For a land area more than 200 sqm, the appraisal value is
reduced to 1/3. |
Applicable Conditions of Reducing Measures
A housing property should exist on the land as of 1st January of
the taxable year.
| |
Tax
Rate & Reducing Measures |
| Building |
Appraisal Value* x
1.4%
Reducing Measures :
For a floor area not over 120 sqm, the tax amount of the left
column is reduced to 1/2 during a period below:
- For a house: 3 years since newly built.
- For an apartment house: 5 years since newly built. |
Applicable Conditions of Reducing Measures
Case filling all of the followings:
50% or more of gross floor area is used as a residential space, and
gross area (floor area + portioned common area) should be more than
50 sqm and not over 280 sqm. (The lower limit of 50 sqm. is applicable
to properties newly built as of 2nd January 2000 or afterwards, and
the upper limit of 280 sqm. for properties newly built as of 2nd
January 2001 or afterwards)
CITY
[URBAN] PLANNING TAX (Local Tax)
For any local authority of village, town or city contains an area
to ‘urbanize’, the City Planning Tax is charged on
persons owing any real property within such ‘urbanizing’ zone.
| |
Tax
Rate & Reducing Measures |
| Land |
Appraisal Value* x
0.3%
Reducing Measures :
- For a land area not over 200 sqm, the appraisal value is
reduced to 1/3.
- For a land area more than 200 sqm, the appraisal value is
reduced to 2/3. |
| Building |
Appraisal Value x 0.3%
Reducing Measures : N/A |
Applicable Conditions of Reducing Measures
A housing property should exist on the land as of 1st January of
the taxable year.
*Appraisal Value: A value to calculate the fixed property tax on
a property. Usually listed in tax register book. The value is unique
and independent from actual costs to build or purchase the land.
For cases of newly building, improving or making an enlargement to
a property, a new value will be sought by referring to other existing
values in vicinity and approved by a register of the authority. Generally,
50-70% of construction cost for building property and around 70%
of a purchasing price for the land property.
SIMULATION
|
Prerequisites:
| Property type: |
Pre-owned Apartment House |
| Exclusive area: |
50.06 sq.m. |
Appraisal Values (for Fixed Asset
Tax):
- Land value:
- Building value: |
¥913,500
¥6,103,000 |
Appraisal Values (for City Planning
Tax):
- Land:
- Building: |
¥2,172,000
¥6,103,000 |
| Loan Period: |
25 years |
| Type of Loan: |
Bank Loan |
| Amount of Loan: |
¥40,000,000 |
| Loan Rate: |
2.65% |
| Credit: |
|
| ¥10,169,498 |
*Self Finance |
| ¥40,000,000 |
*Bank Loan |
| Expenses: |
|
| ¥17,241 |
Management fee
and repairing fund for the closing month |
|
| ¥15,000 |
Stamp Duty for
a purchase agreement |
| ¥20,000 |
Stamp Duty for
a bank loan agreement |
| ¥289,000 |
Property registry
license tax |
| ¥136,000 |
Legal scrivener's
fee |
|
| ¥42,000 |
Loan arrangement
fee |
| ¥690,160 |
Loan guaranty
insurance |
|
| ¥98,200 |
Fixed asset tax |
| ¥215,000 |
City planning
tax |
| ¥98,397 |
Real property
acquisition tax (50%) |
|
| ¥1,548,500 |
Agent Commission
(3.15% + ¥63,000.-) |
|
| ¥50,169,498 |
Total |
|
| Property Value |
¥47,000,000 |
| Purchasing Cost (6.74% of the
purchased value) |
¥3,169,498 |
|
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