Taxes and Expenses after acquiring Real Estate in Japan
When you purchase real estate in Japan such as your own home or an income-generation property, there are taxes and miscellaneous expenses that you have to pay after your purchase or throughout the period of your ownership. We here provide a guidance on taxes and expenses after your purchasing real estate in Japan and how to pay them.
Taxes after acquiring Real Estate
Real Estate Acquisition Tax
When you purchase real estate, Real Estate Acquisition Tax is imposed on it. A notification of the tax due is sent to you from the prefectural government between 6 months and 1 year after your purchase.
Fixed Asset Tax and City Planning Tax
Fixed Asset Tax and City Planning Tax is imposed every year while you own real estate. A tax notice is sent every year around April to June to the real estate owner as of January 1st. The tax payment period is separated into 4 times a year, and you can choose to pay each at a time or pay in lump sum during the first payment period.
If you are in arrears on these tax payments, delinquent charge will be incurred, and if you continue to be delinquent on the taxes, your savings, salary, and real estate may be seized and auctioned off, so be careful about paying these taxes by the deadline.
For more information on the taxes and expenses of purchasing real estate, please see the link below.
For more information on Fixed Asset Tax and City Planning Tax, please see the below link at the article titled “Property Taxes in Japan - Explaining Fixed Asset Tax and City Planning Tax for Non-Japanese”.
How to pay the taxes
Cash payments are common, and these tax payments can be made at tax offices, post offices, convenience stores, and financial institutions in each city. You can also pay by account-to-account transfer of funds when you register your bank account in advance. Credit card payments of Real Estate Acquisition Tax, Fixed Asset Tax, and City Planning Tax, etc. are also available in Tokyo’s 23 wards and some municipalities. Since it is by online procedures, there will be some handling fees, but it is convenient and recommended for non-residents of Japan.
[ Tokyo Metropolitan Tax Credit-Card Payment Website ]
＊When you want to see it in English, please select English at the top of the page below.
Filing Real Estate Income Tax
When you rent out your real estate and you earn real estate income, income tax will be imposed on the income and you are required to file a yearly income tax return. In general, yearly tax returns are filed by those who have income themselves or by a certified tax accountant on behalf of them.
For more information on income tax levied on real estate income, please see the link below :
Appointment of Tax Agents for Non-Residents
When the taxpayer of real estate is a non-resident of Japan, you are required to appoint a Tax Agent on your behalf who receives documents from the tax office, etc., pays taxes such as Fixed Asset Tax, files a yearly income tax returns in Japan. When you have decided on your Tax Agent, you need to submit a “Notification of Tax Agent” to the local tax office which has jurisdiction over your real estate property.
Expenses When Owning an Apartment
When you own an apartment, you are required to pay management expenses, reserve fund for repair, resident's association membership fee, parking fee, etc. to a condominium management company by the designated date every month. Such payments are usually made by account-to-account transfer of funds or remittance to the bank account of the management company.
Property management services for owners residing overseas
For non-residents of Japan, it is difficult to make various payments as described above without delay. So, we recommend that you ask a real estate company on your behalf to appoint a Tax Agent, to make various payments, and to file a yearly tax return.
We at PLAZA HOMES provide one-stop services such as various payment services, tax payments, tenant recruitment of your property, rent collection, and repair services, on behalf of the owners residing overseas for their real estate properties.
From purchasing real estate to managing the real estate for investment, we can provide our experienced and quality services.
For more information, please refer to the article titled “Property Management Services in Tokyo, Japan”