When buying real estate in Japan, many of the taxes are based on the fixed asset value of the individual property, which is different to the purchase price. If you have narrowed down your search to a few properties, your agent should be able to provide you with a general estimate of the taxes and costs.
In any case, plan for the taxes to be equivalent to around 6~7% on top of the purchase price.
|Stamp Tax||5,000 ~ 60,000 Yen+|
Stamp tax is paid when signing a construction contract, sales contract or mortgage contract. The tax is based on the purchase price.
|Purchase Price||Stamp Tax|
|5 ~ 10 million Yen||5,000 Yen|
|10 ~ 50 million Yen||10,000 Yen|
|50 ~ 100 million Yen||30,000 Yen|
|100 ~ 500 million Yen||60,000 Yen|
*The table above has been updated to account for a reduction in stamp tax which applies to transactions that take place between April 1, 2014 and March 31, 2018.
|Real Estate Registration Tax||Land: 1.5% of the fixed asset value
Building*: 0.3% of the fixed asset value
This tax is paid upon transfer of ownership, and also when a mortgage is taken out on a property. A judicial scrivener will provide an estimate of the registration tax that must be paid.
The tax rate is 1.5% of the fixed asset value of the land, plus 0.3% of the value of the building (*if the floor area is over 50 sqm, within a certain age, and used as a personal residence). If the property is to be used as a second home or rented out, the tax rate on the building is 2.0% of the fixed asset value.
Mortgage registration tax is 0.4% of the value of the mortgage. For personal residences that meet certain requirements, the tax rate may be reduced to 0.1%.
|Real Estate Acquisition Tax||Land: 1.5% of the fixed asset value
Building: 3.0% of the fixed asset value
You will receive a bill for the real estate acquisition tax from the tax office within 6 months after purchase.
- 1.5% of the fixed asset value of the land.
- 3.0% of the fixed asset value of the building.
The normal tax rate for land is 3% of the fixed asset value, but if the land is designated as ‘building land’ the tax rate is halved.
Deductions apply for new housing and housing that has received long-term superior housing certification. There are also deductions for secondhand homes and apartments will which vary depending on the age of the building, its size and purpose of use.
|Brokerage Fees||3% + 60,000 Yen + Consumption tax|
If you are using the services of a real estate agent when buying real estate in Japan, you will be required to pay them a brokerage fee or commission of 3% of the base price + 60,000 Yen + consumption tax (currently 8%).
The base price may vary from the actual purchase price if the property includes consumption tax, so make sure you check that your agent has not overcharged you.
|Fixed Asset & City Tax||Fixed asset: 1.4% of the base taxation amount
City tax: 0.3% of the base taxation amount
The annual fixed asset and city taxes will be different for each property, so please check with your agent for the latest tax figures. Taxes will be higher for properties with a larger and more valuable share of land ownership.
You will have to pay the pro-rated taxes to the seller at the time of sale, and then continue to pay these taxes to the tax office each year.
These taxes are usually halved for the first 3 ~ 5 years after a new home or apartment building is completed.
Example of annual fixed asset and city taxes:
- 32-year old 26sqm apartment in Roppongi: 51,141 Yen
- 8-year old 102sqm apartment in Shibaura: 252,324 Yen
- 24-year old 165sqm apartment in Motoazabu: 1,438,742 Yen
- 17-year old house in Nishihara: 1,399,896 Yen
|Management and repair fund fees||350 ~ 600 Yen/sqm+ per month|
If you own an apartment, you will be required to pay monthly fees to the building’s management company and to the repair fund. Management fees go towards the general running of the building, while repair fund fees go towards future repairs of the common area. The fees are calculated based on the internal size of your apartment, so larger apartments will incur higher monthly fees. There may also be additional fees for apartments with roof terraces or gardens.
Fees may be set low by a developer when a building is new, but as the building ages these fees may have to increase. The building’s owners association (made up of apartment owners) have the right to vote to change the fees.
These fees may typically range from 350 to 600 Yen per square meter, depending on the building and its facilities, although you may find some properties with higher fees.
|Mortgage Fees||Contact your bank|
If you are purchasing with finance, your bank will charge you fees on top of the mortgage. Please contact your bank directly to inquire about the fees as they may vary and there are different options for payment.
|Fire and Earthquake Insurance||Contact your insurer|
Fire insurance is usually required as a condition of a bank loan, but otherwise is optional for property buyers. Earthquake insurance is also optional, and may be taken out along with fire insurance (but cannot be taken out on its own).
Payouts are limited, so please contact your insurer to find out about premiums and maximum payouts. For earthquake insurance, maximum payouts may be capped at 50 million Yen regardless of the market price of the property.