Selling property in Japan from abroad: what will you actually keep?

Your estimate

Worked example: Minato condo, bought 2016 for ¥60m, sold 2026 for ¥95m

A non-resident owner living in Hong Kong or Taipei sells a used condo in Minato-ku to a company (so the 10.21% withholding applies). Bought April 2016, sold June 2026; reinforced concrete, land 30% of the price; used as a pied-à-terre (not rented). Purchase costs ¥4,078,800: brokerage at the 2016 cap with 8% consumption tax, plus acquisition tax, registration tax, stamp duty and scrivener estimated with our purchase calculator at today's rates.

Result: the taxable gain is ¥33,745,000 after ¥6,055,447 of building depreciation. Held more than 5 years at 1 January 2026, so the rate is 15.315% (no inhabitants tax because the seller has no Japanese address on 1 January 2027): tax ¥5,168,000. The buyer withholds ¥9,699,500 (10.21% of ¥95m) at settlement, so you receive ¥82,069,500 on the day; after filing a return through your tax representative you get ¥4,531,500 back. Net proceeds ¥86,601,000 — Japanese tax is 15.3% of the gain. If the same seller moved to Japan before 1 January 2027, inhabitants tax of ¥1,687,200 would be added (20.315% in total).

Same flat, rented out the whole time: depreciation ¥11,149,735 (rental life, claimed each year) lowers the cost, so tax is ¥6,242,200 and net proceeds ¥85,526,800.

Short-term: bought March 2022 for ¥60m, sold June 2026 for ¥75m to an individual buying it as their own home — 30.63% applies, tax ¥3,288,400, no withholding (¥0); net ¥69,140,600.

The rules, checked against official sources

The buyer withholds 10.21% of the whole price

When you sell land or a building in Japan while you are a non-resident, the buyer must withhold 10.21% of the price (not the gain) and pay it to the tax office by the 10th of the next month. It is an advance payment of your income tax. Exception: the buyer is an individual buying it as their own or a relative's home and the price is ¥100m or less. A company buyer always withholds. (Income Tax Act art. 161(1)(v), 212, 213; Enforcement Order art. 281-3; NTA No.2879)

Tax rate: 15.315% or 30.63% for a non-resident

Long-term means held more than 5 years as of 1 January of the year you sell — a flat bought in 2020 or earlier is long-term when sold in 2026; bought in 2021, it is still short-term all through 2026. National tax: 15% (long) or 30% (short) income tax plus 2.1% surtax = 15.315% / 30.63%. The familiar 20.315% / 39.63% add 5% / 9% inhabitants tax (住民税), which is levied only on people with a Japanese address on 1 January of the year after the sale (Local Tax Act art. 39, 294, 318). So: living abroad on that 1 January → 15.315% / 30.63%; living in Japan on that 1 January (including moving back before then) → 20.315% / 39.63%. From 2027 the 2.1% becomes 1.1% reconstruction + 1% defence surtax: same total.

How the gain is worked out

Gain = sale price − acquisition cost − selling costs. Acquisition cost = price + purchase costs (brokerage, registration tax, acquisition tax, stamp duty) + improvements, minus building depreciation. If you can't prove the cost, or it is lower, you can use 5% of the sale price. Selling costs are the brokerage fee and your stamp duty (also eviction payments, demolition, survey). Repairs, fixed asset tax and mortgage-release costs are not deducted. (NTA No.3202, 3252, 3255)

Depreciation cuts your cost even if you never claimed it

For a home you used yourself or left empty: building cost × 0.9 × rate × years held, where the rate is for 1.5× the statutory life (reinforced concrete 0.015, wood 0.031), 6 months or more counted as a year, capped at 95%. For a rental: the depreciation you claimed (or should have claimed) in your rental returns. (NTA No.3261, 2100, 2106)

The ¥30m home-sale deduction rarely applies to overseas owners

The law gives it to an individual (it does not exclude non-residents), but only for a home you actually lived in, sold by 31 December of the 3rd year after moving out, not a holiday home, not sold to a close relative. So it can help someone who lived in the flat and moved abroad; it does not help an investor or holiday-home owner. Held over 10 years as a home, the income-tax rate drops to 10% on the first ¥60m. (Special Taxation Measures Act art. 35, 31-3; NTA No.3302, 3305)

Brokerage and other selling costs

The legal maximum brokerage is 3% of the price + ¥60,000, plus 10% consumption tax (¥95m → ¥3,201,000). For a low-cost vacant home of ¥8m or less the agent may charge up to ¥330,000 incl. tax if agreed in advance (from July 2024). Stamp duty on the sale contract: ¥30,000 for ¥50–100m (reduced rates for contracts to 31 March 2027). Releasing a mortgage costs ¥1,000 registration tax per property plus a scrivener (national average ¥17,470); updating an old registered address, another ¥1,000 per property plus about ¥13,913. Overseas sellers often also need a notarised sworn statement.

File a Japanese return and get the excess back

A non-resident who sells Japanese property must file a Japanese income-tax return for the year of sale, usually through a tax representative (納税管理人) registered with the tax office. Tax due is paid by 15 March of the following year; the 10.21% withheld is credited and any excess refunded. If there is no tax to pay (for example a loss), a refund-only return can be filed for 5 years from 1 January of the following year. (NTA No.1926, 2030)

Your home country

Tax treaties generally let Japan tax gains on property located in Japan. Taiwan, Hong Kong, Korea, the US and other places have their own rules: your home country may also tax the gain, and a foreign tax credit or exemption may reduce double taxation. Check with an adviser at home.

Next steps

• Estimate what your property could sell for
• Owner checklist 2026: taxes, deadlines and filings
• Tax & cost calculator (buy, hold, rent)

Not included

• Consumption tax on a building sold by a business, corporate sellers, land-only rules and exchanges.
• Carry-over of losses (a loss on property generally cannot be offset against other income).
• Fixed asset tax proration between seller and buyer (customary, settled at closing).
• Tax-accountant fees and currency conversion costs unless you enter them.
• Home-country taxes and treaty details.

Official sources

• NTA No.2879 (withholding 10.21%)
• NTA No.3208 / 3211 (long / short rates)
• NTA No.3211
• NTA No.3202 / 3252 / 3255 (gain, cost, selling costs)
• NTA No.3252
• NTA No.3255
• NTA No.3261 (depreciation, own use)
• NTA No.3302 (¥30m deduction)
• NTA No.3305 (10-year reduced rate)
• NTA No.1926 (non-resident filing, 納税管理人)
• NTA No.2030 (refund-only returns)
• NTA No.7108 (stamp duty)
• Income Tax Act art.161, 212, 213 (e-Gov)
• Income Tax Act Enforcement Order art.281-3 (e-Gov)
• Special Taxation Measures Act art.31, 32, 35 (e-Gov)
• Local Tax Act art.39, 294, 318 (e-Gov)
• MIC: individual inhabitants tax for foreign nationals
• MOJ Legal Affairs Bureau: registration tax (mortgage release ¥1,000 per property) PDF
• MLIT: brokerage fee caps (PDF)
• Japan Federation of Shiho-Shoshi: 2024 fee survey (PDF)

Estimates only — confirm with a licensed Japanese tax accountant (税理士). Japan House Prices is not a real estate broker or tax accountant and does not give tax advice; we introduce you to licensed Japanese brokers and tax accountants. Rules last reviewed 2026-09-27. Exchange rates are indicative.