Japan places few restrictions on foreign ownership of real estate — there’s no special barrier separating what Japanese nationals and foreigners can buy. That said, the tax mechanics differ meaningfully from what many foreign buyers are used to, and non-residents in particular face a few extra obligations. Here’s what to know at each stage, from purchase to sale.
What Changes at Each Stage
1. When You Buy
A one-time real estate acquisition tax applies when you purchase property. If you’re a non-resident, two additional obligations kick in:
- Reporting the acquisition to the Ministry of Finance via the Bank of Japan within 20 days of the purchase
- Appointing a tax agent (nozei kanrinin) to handle tax filings and payments on your behalf
⚠️ Starting in 2026, every property buyer — not just foreigners — must have their nationality verified at the point of purchase. This isn’t a restriction on who can buy; it’s a new measure allowing the government to systematically track nationality data across real estate transactions.
2. While You Hold It
Whoever owns the property as of January 1 each year owes Fixed Asset Tax (standard rate of 1.4% of the assessed value) plus a City Planning Tax. Being a foreign owner doesn’t change the rate or add any extra burden here.
3. If You Rent It Out (Non-Residents)
If you’re a non-resident landlord receiving rental income from a Japan property, your tenant withholds 20.42% of the rent and remits it to the tax office. This gets reconciled against your actual tax liability through an annual final tax return.
💡 Run your own numbers — try the US Capital Gains Tax Calculator (2026).
4. If You Sell (Non-Residents)
When a non-resident sells property, the buyer withholds 10.21% of the sale price. That means you initially receive only 89.79% of the contract amount, with the rest reconciled later through a final tax return.
This withholding is waived if all of the following apply:
- The buyer is an individual
- The sale price is JPY 100 million or less
- The buyer intends to use the property as their own or a relative’s residence
Quick Summary
| Stage | Key Point |
|---|---|
| Acquisition | Acquisition tax + (non-residents) 20-day reporting duty and a required tax agent |
| Holding | Fixed Asset Tax 1.4% + City Planning Tax, no distinction by nationality |
| Renting out | (Non-residents) 20.42% withholding on rental income |
| Selling | (Non-residents) 10.21% withholding on sale price, waived if conditions are met |
This article is for general informational purposes only. Actual tax rates and procedures depend on your specific circumstances and are subject to legal changes. Always consult a tax accountant or judicial scrivener (shiho shoshi) before an actual transaction.
Frequently Asked Questions
Q. Can foreigners buy property in Japan the same way Japanese nationals can?
A. Yes. Japan places few restrictions on foreign ownership of real estate — there’s no special barrier separating what Japanese nationals and foreigners can buy.
Q. What extra obligations does a non-resident buyer face at purchase?
A. Reporting the acquisition to the Ministry of Finance via the Bank of Japan within 20 days, and appointing a tax agent (nozei kanrinin) to handle filings and payments.
Q. What tax applies just from holding the property?
A. Fixed Asset Tax (standard rate of 1.4% of assessed value) plus a City Planning Tax, owed by whoever owns the property as of January 1 each year — the rate doesn’t change based on nationality.
Q. What withholding applies when a non-resident sells?
A. The buyer withholds 10.21% of the sale price, so you initially receive only 89.79% of the contract amount. This withholding is waived if the buyer is an individual, the price is JPY 100 million or less, and the buyer will use it as their own or a relative’s residence.
Key Takeaways
- Japan places few restrictions on foreign real estate ownership.
- Non-resident buyers face a 20-day Bank of Japan reporting duty and must appoint a tax agent.
- Holding costs: Fixed Asset Tax 1.4% + City Planning Tax, the same for all owners regardless of nationality.
- Non-resident landlords face 20.42% withholding on rental income; sellers face 10.21% withholding, waivable under conditions.
- From 2026, all buyers’ nationality must be verified at the point of purchase.