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Property Buying Costs and Taxes

This page explains necessary costs and taxes to buy a property in Japan including explanations and examples.

This simple guide can be useful for any buyers including first-time buyers.

Costs and taxes required in buying a property

The table below describes property buying costs and taxes for the stages from signing a contract to tax payment.

When signing a contract

Stamp duty Documentary stamp tax required for the sales contract.
Down payment 10 to 20% of the sales price

When applying for a housing loan

Stamp duty Documentary stamp tax required for the loan contract.

When settling the remaining payment

Remaining sum of the sales price of the property
Costs to
obtain a loan
  • Bank commission
  • Guarantee commission
  • Fire insurance premium
Settlement money
on a pro-rate basis
Agent Commission 3% of the sales price + 60,000 yen + consumption tax in accordance with property transaction regulations.
Registry License Tax For registering ownership transfer or mortgage on a property.
Commission for
the Legal Scrivener
Fee for conducting owneriship transfer and necessary related registaration.

Tax payment after buying a property

Real Estate
Acquisition Tax
Tax on purchase of property.
Approximately 3 to 6 month after buying a property, all necessary documents related to the tax are sent by the tax office responsible for the property.

To Costs and taxes required in buying a property

Examples of Property Buying Costs

Here are some examples of buying costs of a house and an apartment.
You can download PDF version of “Examples of Property Buying Costs”.

  • House
  • Apartment
Property summary
Property type House
Land Size 151.48 sq.m. Appraisal value Land ¥45,042,560
Building Size 206.85 sq.m. Appraisal value Building ¥11,148,500
Payments
Own funding ¥38,613,460
Loan ¥112,000,000
Life of loan 35 years
Loan type Bank Loan
Loan rate 2.475%
Total ¥150,613,460
Expenses
Sales price ¥140,000,000
Miscellaneous costs ¥10,613,460
7.58% of the sales price.
Total ¥150,613,460
Breakdown of expenses
When signing a contractDeposit ¥14,000,000
Stamp duty ¥80,000
When applying for a housing loanStamp duty ¥100,000
When settling the remaining feesLoanBank commission ¥31,500
Guarantee charges ¥2,308,432
Fire insurance premium ¥800,000
Remaining sum of the sales price of the property ¥126,000,000
Settlement money on a pro-rate basisFixed Asset Tax /
City Planning Tax
¥174,900
Agent commission (3%+¥60,000+consumption tax) ¥4,600,800
Registration costs ¥1,507,828
Tax paymentReal Estate Acquisition Tax ¥1,010,000
Total ¥150,613,460

This is just a example. Please be advised that the situation may vary depending on properties and financial institutions.

Property summary
Property type Apartment Exclusive Size 50.06 sq.m.
Assessed value Land ¥6,581,388 Assessed value Building ¥6,103,000
Payments
Own funding ¥10,208,589
Loan ¥40,000,000
Life of loan 25 years
Loan type Bank Loan
Loan rate 2.65%
Total ¥50,208,598
Expenses
Sales price ¥47,000,000
Miscellaneous costs ¥3,208,598
6.83% of the sales price.
Total ¥50,208,598
Breakdown of expenses
When signing a contractDeposit ¥4,700,000
Stamp duty ¥15,000
When applying for a housing loanStamp duty ¥20,000
When settling the remaining feesLoanBank commission ¥42,000
Guarantee charges ¥690,160
Remaining sum of the sales price of the property ¥42,300,000
Settlement money on a pro-rate basisFixed Asset Tax /
City Planning Tax
¥313,200
Management fee /
Repairing fund
¥17,241
Agent commission(3%+¥60,000+consumption tax) ¥1,587,600
Registration costs ¥425,000
Tax paymentReal Estate Acquisition Tax ¥98,397
Total ¥50,208,598

This is just a example.
Please be advised that the situation may vary depending on properties and financial institutions.

To Examples of Property Buying Costs

Tax Guidance

The table below shows the lists of taxes in relation to buying a property in Japan.

Taxes charged when purchasing

STAMP DUTY(National Tax):

The stamp duty is levied on each contract. The following amount of Tax is to be paid for a stamp and it is to be affixed on a contract after *Reducing Measures being added.

Price on ContractConstruction ContractReal Estate Sales ContractLoan Contract
Less than ¥1M ¥200 ¥500 ¥1,000
Less than ¥5M ¥200-1,000 ¥1,000 ¥2,000
Less than ¥10M ¥5,000 ¥5,000 ¥10,000
Less than ¥50M ¥10,000 ¥10,000 ¥20,000
Less than ¥100M ¥30,000 ¥30,000 ¥60,000
Less than ¥500M ¥60,000 ¥60,000 ¥100,000
Less than ¥1B ¥160,000 ¥160,000 ¥200,000
*Reducing Measures :
The above amount is applicable for a contract of real estate sales and construction concluded by 31 March 2018.

REGISTRATION AND LICENSE TAX(National Tax):

It is a Tax levied on registration of preservation or transfer of ownership, or establishment of a mortgage on a property.  A separate registration is required for land and building.

CategoryTax Rate for Registration (Reg.)Reducing Measures*
New Residence Land Assessed Value* x 2.0% (Reg. of Ownership Transfer) x 1.5%
Building Assessed Value x 0.4% (Reg. of Ownership Retention) x 0.15%
Pre-owned Residence Land Assessed Value x 2.0% (Reg. of Ownership Transfer) x 1.5%
Building Assessed Value x 2.0% (Reg. of Ownership Transfer) x 0.3%
Establishing a mortgage Claim Amount x 0.4% (Reg. of Establishing Mortgage) x 0.1%

* Assessed Value of fixed assets:
It is a value used for calculation of Property tax, City planning tax, Real estate acquisition tax, and Registration and License tax. The assessed value is listed on property tax ledger in the local government office.  Generally, it is 50-70% of construction cost for a building property and around 70% of a market price for land.

*Reducing rates will be valid until end of March 2017.

Necessary Conditions for Reducing Measures
  • Floor area (registered)  of 50 sqm or above
  • A housing property for own residence
  • A property registered within 1 year from the acquisition date.
  • Fireproof properties such as condominiums less than 25 years old, and other properties such as wooden-made properties less than 20 years old.  If the property is older than each defined age, the property must satisfy a certain standard, such as being certified for new earthquake resistance standards, or being insured for the defect insurance on traded existing houses.
  • For establishing a mortgage, a property which satisfies all above conditions.

REAL ESTATE ACQUISITION TAX (Local Tax):

It is a Tax levied on acquiring land and/or building by purchase or donation, or levied when a building is newly constructed or renovated.

• Case of New residential housing (including extension and renovation)

 Tax Rate & Reducing Measures
Building Assessed Value* x 3%
Reducing Measures : (Assessed Value – Special Deduction of JPY12M) x 3%

Necessary Conditions for Reducing Measures:
  • Gross floor area of more than 50 sqm and not over 240 sqm (Rental residence unit other than a detached house: Gross floor area per unit of more than 40 sqm and not over 240 sqm )
Land Assessed Value x 50% x 3%
The higher amount from the two below can be deducted from the above tax amount:
  • ¥45,000
  • (Assessed value of land per sqm x 1/2) x (Taxable floor area in sqm x 2 (less than 200 sqm)) x 3%
Necessary Conditions for Reducing Measures
  • When necessary conditions for tax reducing listed on “Building” are satisfied.
  • Advance acquisition of Land: When a building on it is newly constructed within 3 years since a land is acquired (Valid by 31 March 2016)
  • Advance construction of Building: When a land is leased and is later acquired within 1 year after a building is newly constructed on it.

* Assessed Value: Assessed Value of fixed assets

• Case of Pre-owned Residence

 Tax Rate & Reducing Measures
Building

Assessed Value* x 3%
Reducing Measures : (Assessed Value – Special Deduction of JPY12M) x 3%

Completion dateDeduction 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
Necessary Conditions for Reducing Measures All of the following:
  • A housing property for own residence
  • Gross floor area of more than 50 sqm and not over 240 sqm
  • The property must meet one of the following criteria:
    • It is built after January 1st, 1982 (This must be verified by referring to the completion date noted on a property tax ledger of a local government office)
    • It doesn't meet 1), but has been certified for the new earthquake resistance standard or is insured for the defect insurance on traded existing houses.
    • A property acquired after April 1st, 2014 is not applicable for the new earthquake resistance standard but is renovated to meet the standard before move-in.
Land Assessed Value x 3%
Reducing Measures:(Assessed Value x 1/2 x 3%) – Deduction (Higher amount of the following A or B)
  • ¥45,000
  • (Assessed value of land per sqm x 1/2) x (Taxable floor area in sqm x 2 (less than 200 sqm) x 3%
Necessary Conditions for Reducing Measures
All of the following:
  • When necessary conditions for tax reducing listed on “Building” are satisfied.
  • Advance acquisition of Land: When a building on it is acquired within 1 year after a land is acquired
  • Advance construction of Building: When a land is leased and is later acquired within 1 year after a residential property was newly built on it.

* Assessed Value: Assessed Value of fixed assets

Taxes for retaining property

FIXED ASSET TAX(Local Tax):

A person who owns a property as of the 1st of 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 for 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 government.

 Tax Rate & Reducing Measures
Land Assessed 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 assessed value is reduced to 1/3.
Necessary Conditions for Reducing Measures

A residential property should exist on the land as of the 1st of January of the taxable year.

 Tax Rate & Reducing Measures
Building

Assessed 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 for the duration of:
- House: For 3 years after completion.
- Apartment house: For 5 years after completion.

For buildings newly built by 31 March 2016.

Necessary Conditions for Reducing Measures

All of the following:
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.

CITY [URBAN] PLANNING TAX(Local Tax):

The City Planning Tax is charged to persons owning any property within areas of urban districts or city planning districts designated by local government.

 Tax Rate & Reducing Measures
Land Assessed Value* x 0.3%
Reducing Measures :
- For a land area not over 200 sqm, the assessed value is reduced to 1/3.
- For a land area more than 200 sqm, the appraisal value is reduced to 2/3.
Building Assessed Value* x 0.3%
Reducing Measures : N/A
Necessary Conditions for Reducing Measures

A residential property should exist on the land as of the 1st of January of the taxable year.

 

 

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To Tax Guidance

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