Property
Japan — Property: Property Taxes
Owning property in Japan involves several distinct taxes. At purchase: real estate acquisition tax of 3-4% of assessed value (standard rate 4%, reduced to 3% for residential property), plus registration and license tax paid at the Legal Affairs Bureau — 1.5% of assessed value for land (a reduced rate in effect through March 2026), and for buildings 0.4% on newly built homes versus 2.0% on existing (used) homes. Ongoing annually: fixed asset tax of 1.4% of assessed value plus city planning tax of up to 0.3% in urban areas, for a combined annual burden of roughly 1.7% of assessed value; assessed value is reassessed every 3 years by the local municipality and is typically only 50-70% of market value. A significant 2026 tax reform applies the 10% national consumption tax to real estate brokerage services for non-resident buyers/sellers, which were previously zero-rated as exports — directly raising transaction costs for offshore investors by the brokerage commission times 10%.
Key facts
- Real estate acquisition tax (one-time): 3-4% of assessed value (4% standard, 3% reduced rate for residential).
- Registration and license tax (one-time): land 1.5% (reduced rate through March 2026); buildings 0.4% (new) or 2.0% (used).
- Fixed asset tax + city planning tax (annual): ~1.7% combined (1.4% + up to 0.3%) of assessed value, reassessed every 3 years.
- Assessed value is typically only 50-70% of market value.
- 2026 reform: 10% consumption tax now applies to brokerage services for non-resident buyers/sellers, previously zero-rated.
Costs
- Real estate acquisition tax: 3-4% of assessed value
- Registration and license tax (land): 1.5% of assessed value
- Registration and license tax (building, new/used): 0.4% / 2.0% of assessed value
- Annual fixed asset tax + city planning tax: ~1.7% of assessed value combined
Timelines
- Fixed asset value reassessment cycle: every 3 years
- Reduced land registration tax rate expires: March 2026
Common mistakes
- Calculating taxes against market value instead of assessed value, which is typically only 50-70% of market price.
- Overlooking the new 10% consumption tax on brokerage commissions for non-resident buyers/sellers introduced in the 2026 tax reform.