What Kind of Tax Should a Buyer Pay for Purchasing a Property in Japan?

A buyer should pay 4 kinds of taxes.

1. Fixed Asset Tax (annually)
2. Registration Tax
3. Income Tax
4. Real Estate Acquisition

①Fixed Asset Tax

• A buyer has to pay fixed asset tax once a year.
• Fixed asset tax is calculated depending on valuation of the property, but it will approximately equivalent to 1 month rental fee.
• The valuation is judged by the government, and only an owner of the property knows the valuation.

②Registration Tax

• Registration tax is imposed for the valuation of a property.
• it is approximately 120,000~150,000 Yen (if the property is 1 room property)

③Income Tax

• Depends on how much your annual actual income. If it is less than 480,000 yen, tax payment will be exempted.

※Annual income= (( Monthly Rent Income – All Expenses) x 12month))-Depreciation

All Expenses = Such as maintenance fee, property management fee

④Real Estate Acquisition Tax

• A buyer will be billed a real estate acquisition tax about 6 months ~ 1 year later after purchasing a property.
• This tax rate is different between a land and property.