The short answer
| Question | Answer |
|---|---|
| Can a non-resident sell property in Japan? | Yes. No permission is needed; the process is the same as for a resident, with extra paperwork for signing from abroad. |
| What is the 10.21% withholding? | The buyer keeps 10.21% of the price and pays it to the tax office as a prepayment of your income tax, unless the buyer is an individual buying it as their own or a relative’s home for ¥100 million or less. |
| What tax do I actually owe? | Tax on the gain, not the price: 15.315% if held more than 5 years, 30.63% if 5 years or less (as of 1 January of the year of sale). Add inhabitant tax (5%/9%, totals 20.315%/39.63%) only if you have an address in Japan on 1 January of the following year. |
| Do I get the withholding back? | Usually most of it. You file a Japanese return (through a tax agent) and the difference is refunded or collected. |
| When do I file? | By 15 March of the year after the sale. A refund-only return can be filed from 1 January for five years. |
The numbers below are what our net proceeds calculator uses; this page explains them.
The 10.21% withholding at closing
When a buyer pays a non-resident (or a foreign company) for land or buildings in Japan, the Income Tax Act makes the buyer withhold 10.21% of the price (10% income tax × 1.021 for the reconstruction surtax) and pay it to the tax office by the 10th of the following month. It is calculated on the whole price, not on your profit, so it is normally far more than the tax you finally owe. It applies to the deposit as well as the balance.
Exception: no withholding when the buyer is an individual who bought the property as a home for themselves or a relative and the price is ¥100 million or less. A company buyer, an investor buyer, or any price above ¥100 million means withholding applies (NTA No.2879).
From 2027 the surtax is split into 1.1% reconstruction and 1% defence; the total stays 10.21%.
Practical consequences: your closing statement shows the price less 10.21%; the buyer gives you a withholding slip; and you need a Japanese return the following year to get the excess back. If the tenant of a rented-out property is a company, the same logic has already applied to your rent at 20.42% (NTA No.2884).
Capital gains tax: short-term vs long-term
Gains on Japanese real estate are taxed separately from other income (分離課税). The rate depends on how long you owned it as of 1 January of the year you sell, not the actual sale date:
| Holding period on 1 Jan of sale year | Income tax (incl. 2.1% surtax) | Inhabitant tax | Total if you live abroad | Total if you have a Japanese address on the next 1 Jan |
|---|---|---|---|---|
| Short-term: 5 years or less (NTA No.3211) | 30% × 1.021 = 30.63% | 9% | 30.63% | 39.63% |
| Long-term: more than 5 years (NTA No.3208) | 15% × 1.021 = 15.315% | 5% | 15.315% | 20.315% |
With year-only dates: a sale in 2026 is long-term if you bought in 2020 or earlier. Buying in 2021 and selling any time in 2026 is short-term, even if the actual span is more than five years.
Inhabitant tax (5%/9%) is a local tax charged to people who have an address in a Japanese municipality on 1 January of the year after the income. A seller who lives abroad on that date does not pay the income-based part, which is why the widely quoted 20.315% / 39.63% become 15.315% / 30.63% for most overseas sellers. If you move (back) to Japan before that 1 January, the full rate applies.
The gain = price − (acquisition cost + selling expenses) − any special deduction (NTA No.3202). Acquisition cost includes the purchase price, purchase broker fee, registration and acquisition taxes and stamp duty, less depreciation on the building part (No.3252, No.3261). Selling expenses include the broker fee, seller’s stamp duty, survey or demolition costs needed to sell (No.3255). If you cannot prove the cost, 5% of the price can be used. The ¥30 million deduction for a home you lived in (No.3302) is available to individuals including non-residents, but only within three years of the end of the year you moved out, and never for a holiday home or a rental.
Selling costs on the Japanese side
- Broker’s fee: capped by MLIT notice at 3% of the price + ¥60,000 + consumption tax for prices above ¥4 million (the same table as on cost of buying). On ¥60 million the cap is ¥1,860,000 + 10% = ¥2,046,000.
- Stamp duty on the sale contract: ¥10,000 for ¥10–50 million, ¥30,000 for ¥50–100 million, ¥60,000 for ¥100–500 million at the reduced rates valid for contracts signed to 31 March 2027 (NTA No.7108).
- Mortgage cancellation, if any: registration tax ¥1,000 per property plus a judicial scrivener’s fee (2024 association survey average about ¥17,000); plus the cost of the affidavit of signature and address that a non-resident uses in place of a Japanese seal certificate.
- Tax agent and accountant fees for the Japanese return; ask for a quote before signing.
Tax agent, filing and the refund
- Appoint a tax agent (納税管理人). A non-resident who has to file a Japanese return must appoint a tax agent in Japan and notify the tax office with the prescribed form (NTA No.1926). The agent receives correspondence, files the return and handles the refund or payment. Ideally do this before closing; the notification is a one-page form.
- Collect the documents: purchase contract and closing statement from when you bought, invoices for broker fees and improvements, the sale contract and closing statement, the withholding slip from the buyer, and depreciation details for the building.
- File by 15 March of the year after the sale (NTA No.2030). If the return only claims a refund, it can be filed from 1 January and for up to five years, but filing early gets the money back sooner.
- Settle: the 10.21% withheld is credited against the tax on the gain. Excess is refunded to a Japanese bank account (a tax agent can receive it); a shortfall is paid by 15 March.
- Home country: Japan taxes gains on Japanese property; your country of residence may tax the same gain and may credit the Japanese tax under a treaty. That part is for an adviser at home.
Worked example: bought for ¥50m, sold for ¥60m
A non-resident bought a condo in 2018 for ¥50,000,000 with about ¥2,900,000 of purchase costs (roughly the 5.8% in our cost-of-buying example), sells it in 2026 for ¥60,000,000 to a company, and still lives abroad on 1 January 2027. Building depreciation is ignored here to keep the arithmetic short; in reality it reduces the cost and increases the gain, which the calculator handles.
| Sale price | ¥60,000,000 |
| Acquisition cost (price + purchase costs) | −¥52,900,000 |
| Selling expenses (broker fee cap ¥2,046,000 + stamp duty ¥30,000) | −¥2,076,000 |
| Taxable gain (rounded down to ¥1,000) | ¥5,024,000 |
| Tax at 15.315% (long-term, no Japanese address on 1 Jan 2027) | ¥769,400 |
| Withheld by the buyer at closing (10.21% × ¥60,000,000) | ¥6,126,000 |
| Refund after filing | ¥5,356,600 |
| Net proceeds after Japanese tax and selling costs | ¥57,154,600 (95.3% of the price) |
| If instead the seller has a Japanese address on 1 Jan 2027 (20.315%) | tax ¥1,020,600 |
| If instead bought in 2021 or later (short-term, 30.63%) | tax ¥1,538,800 |
Cash flow matters as much as the tax: the seller receives ¥53,874,000 before fees at closing and waits for the ¥5,356,600 refund until after the return is processed the following spring. Had the buyer been an individual purchasing it as their own home (price under ¥100 million), nothing would have been withheld and the full ¥769,400 would be paid with the return.
FAQ
What is the 10.21% withholding tax when selling property in Japan?
A buyer paying a non-resident for Japanese real estate must withhold 10.21% of the price and pay it to the tax office as a prepayment of the seller’s income tax (NTA No.2879). It does not apply when an individual buys the property as a home for themselves or a relative for ¥100 million or less. The seller recovers any excess by filing a Japanese return.
What is the capital gains tax rate for a non-resident selling property in Japan?
15.315% of the gain if the property was held for more than five years as of 1 January of the sale year, 30.63% if five years or less. The extra 5%/9% inhabitant tax only applies if you have an address in Japan on 1 January of the following year.
Do I need a tax agent (納税管理人) to sell property in Japan?
If you must file a Japanese return, which is the case for a gain on Japanese real estate, the National Tax Agency requires a non-resident to appoint a tax agent in Japan and notify the tax office (No.1926). Brokers can usually introduce a tax accountant who acts as one.
When is the Japanese tax return due after selling?
By 15 March of the year following the sale (No.2030). A return that only claims a refund of the withholding can be filed from 1 January and remains possible for five years.
Buying in Japan and want it checked properly?
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Sources
- National Tax Agency, No.2879 withholding when buying land or buildings from a non-resident (10.21%; exemption for an individual's own or relative's home at ¥100 million or less; payment by the 10th of the following month): nta.go.jp (checked 7 October 2026)
- National Tax Agency, No.3211 short-term capital gains (5 years or less on 1 January; income tax 30%, inhabitant tax 9%, surtax 2.1% of income tax): nta.go.jp (checked 7 October 2026)
- National Tax Agency, No.3208 long-term capital gains (more than 5 years on 1 January; income tax 15%, inhabitant tax 5%): nta.go.jp (checked 7 October 2026)
- National Tax Agency, No.1926 non-residents: Japanese-source income including gains on real estate in Japan must be reported; appointing a tax agent: nta.go.jp; the notification form: nta.go.jp (checked 7 October 2026)
- National Tax Agency, No.2030 filing deadline (15 March of the following year) and refund returns (from 1 January, for five years): nta.go.jp (checked 7 October 2026)
- National Tax Agency, No.2884 withholding on rent paid to non-residents (20.42%): nta.go.jp (checked 7 October 2026)
- National Tax Agency, No.3202 how the gain is calculated, No.3252 acquisition cost, No.3255 selling expenses, No.3261 depreciation for non-business property, No.3302 ¥30 million deduction for a home, No.7108 stamp duty on real estate contracts: 3202, 3252, 3255, 3261, 3302, 7108 (verified 27 September 2026 for the calculator; see data/sale-tax-rates.json)
- Inhabitant tax and the 1 January rule: Ministry of Internal Affairs and Communications, individual inhabitant tax; Local Tax Act arts. 39, 294, 318 via e-Gov
- MLIT notice on the broker-fee cap (3% + ¥60,000 + tax above ¥4 million): PDF; mortgage-cancellation registration tax: Legal Affairs Bureau PDF
Last reviewed: 7 October 2026. All National Tax Agency pages cited state the law as of 1 April 2026. Rates can change with each year's tax reform.
Disclaimer. General information, not tax, legal or investment advice. Japan House Prices is not a real estate broker (宅地建物取引業者), a law firm or a tax adviser. Your home-country tax on the same gain is outside the scope of this page. We may receive a referral fee from the broker; you pay nothing to us.