Property Buying Costs and Taxes in Japan

This page explains the necessary costs and taxes for buying a property in Japan including explanations and examples.

This easy to follow guide is for anyone interested in purchasing property in Japan whether you’re an experienced real estate investor or a first-time home buyer.

Costs and taxes required when buying property

The table below describes property buying costs and taxes covering the stages of the purchase process 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 for obtaining a loan
  • Bank commission
  • Guarantee commission
  • Fire insurance premium
Settlement money on a pro-rate basis
  • Fixed Asset Tax
  • City Planning Tax
  • Management fee, Repairing fund (for an apartment)
  • Membership fee for the neighborhood association
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 ownership transfer and necessary related registration.

Tax payment after buying a property

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

Examples of Property Buying Costs

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

Property summary
Property type House
Land Size 151.48 sq.m. Land Appraisal value ¥45,042,560
Building Size 206.85 sq.m. Building Appraisal value ¥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 contract Deposit ¥14,000,000
Stamp duty ¥80,000
When applying for a housing loan Stamp duty ¥100,000
When settling the remaining fees Loan Bank 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 basis Fixed Asset Tax /
City Planning Tax
¥174,900
Agent commission (3%+¥60,000+consumption tax) ¥4,600,800
Registration costs ¥1,507,828
Tax payment Real Estate Acquisition Tax ¥1,010,000
Total ¥150,613,460

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

Property summary
Property type Apartment Exclusive Size 50.06 sq.m.
Land Appraisal value ¥6,581,388 Building Appraisal value ¥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 contract Deposit ¥4,700,000
Stamp duty ¥15,000
When applying for a housing loan Stamp duty ¥20,000
When settling the remaining fees Loan Bank 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 basis Fixed 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 payment Real Estate Acquisition Tax ¥98,397
Total ¥50,208,598

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

Tax Guidance

The table below shows the lists for taxes related to the purchasing of property in Japan.

Taxes charged when purchasing

Stamp Duty (National Tax)

A 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 to a contract after *Reducing Measures being added.

Price on Contract Construction Contract Real Estate Sales Contract Loan 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 real estate sales contract and for construction concluded by 31 March 2020.


Registration and License Tax (National Tax)

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

Category Tax Rate for Registration (Reg.)
New Residence Land
  • Assessed Value* x1.5% (Reg. of Ownership Transfer) valid through March 31, 2019
  • Assessed Value x 2.0% (Reg. of Ownership Transfer) valid from April 1, 2019
Building
  • Assessed Value x 0.4% (Reg. of Ownership Retention)
  • Reducing Measures: Assessed Value x 0.15%
Pre-owned Residence Land
  • Assessed Value x 1.5% (Reg. of Ownership Transfer) valid through March 31, 2019
  • Assessed Value x 2.0% (Reg. of Ownership Transfer) valid from April 1, 2019
Building
  • Assessed Value x 2.0% (Reg. of Ownership Transfer)
  • Reducing Measures: Assessed Value x 0.3%
Establishing a mortgage
  • Claim Amount x 0.4% (Reg. of Establishing Mortgage)
  • Reducing Measures: Assessed Value x 0.1%

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

Necessary Conditions for Reducing Measures
  1. Completion of new construction or acquisition of a housing property by 31 March 2020.
  2. Floor area (registered) of 50 sqm or above
  3. A housing property for own residence
  4. A property registered within 1 year from completion date of new construction or acquisition date.
  5. 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 certain criteria, such as being certified as meeting new earthquake resistance standards, or being insured with defect insurance on traded existing houses.
  6. For establishing a mortgage, a property which satisfies all above conditions.

Real Estate Acquisition Tax (Local Tax)

This tax is levied when acquiring land and/or a 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:
  • A. ¥45,000
  • B. (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 2021)
  • 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 date 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

Necessary Conditions for Reducing Measures All of the following:

  • A housing property for one's 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 was 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 the requirments of condition 1, but has been certified under the new earthquake resistance standard or is insured for the defect insurance on traded existing houses.
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. During the year, when a property is transferred, the person purchasing should pay the remaining taxes for the year (on a pro-rate basis) to the seller when purchasing. The seller 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 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 2020.
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.