Taxes & Costs When Selling Property in Japan
Japanese tax residence matters. A foreign national living in Japan may not be a non-resident, while a Japanese national living overseas may be one.
1. Typical selling costs
Brokerage fee
Real-estate broker compensation is subject to a statutory ceiling. Confirm the agreed fee in the brokerage agreement.
Stamp duty
A paper real-estate sale contract can be subject to stamp tax depending on the contract amount and applicable reduction rules.
Mortgage discharge / judicial scrivener
If registered security remains, discharge registration and professional fees may be required.
Survey, demolition, disposal, moving
Boundary confirmation, demolition, leftover furniture and moving costs depend on the property and contract terms.
2. Capital gains are separate from the sale price
Japan taxes gain on the sale of Japanese real estate under the relevant Japanese income-tax rules. The calculation depends on acquisition cost, qualifying selling expenses, ownership period and available special rules. Do not estimate tax from the sale price alone.
3. Non-resident sellers: 10.21% may be withheld from the gross price
Under National Tax Agency guidance, when Japanese real estate is purchased from a non-resident or foreign corporation, the payer generally withholds 10.21% of the consideration. The main stated exception is where an individual buys the property for their own or a relative’s residence and the price is ¥100 million or less. NTA official rule
4. If you rent the property instead of selling
Non-resident rental income can also have Japanese withholding and filing rules. The NTA’s English page explains that rent for Japanese real estate is Japanese-source income and that withholding can apply depending on the payer and use. NTA English: Real estate income of non-residents
5. What to ask before you sign a sale contract
- What is my expected net amount after loan payoff and transaction costs?
- Will the buyer withhold 10.21% because of my tax-residency status?
- Who will prepare the Japanese tax return and do I need a tax representative?
- What registration and judicial-scrivener costs apply?
- Are survey, demolition, furniture disposal or tenant-related costs part of this sale?