Understanding Japan’s real estate tax system is crucial for making informed investment decisions. While the system may seem complex at first, having a clear grasp of the basics can save investors from unexpected expenses.

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‍Key Real Estate Taxes in Japan

1. Acquisition Tax: A one-time tax imposed on property buyers, typically around 3-4% of the property’s assessed value.
2. Property Tax: An annual tax based on the property’s fixed asset value, with rates generally around 1.4%.
3. City Planning Tax: An additional tax in urban areas, typically 0.3% of the property’s value.
4. Registration and Licensing Tax:Paid during the property registration process, ranging from 0.4% to 2% of the property’s value.
5. Capital Gains Tax: Applies to profits from selling property, with rates differing based on ownership duration.

Tax Incentives for Foreign Investors

• Depreciation Deductions:
• Foreign investors can claim deductions for property depreciation, reducing taxable income.
• Double Taxation Treaties:
• Japan has treaties with many countries to prevent double taxation on property income.

How to Stay Tax-Compliant

‍Working with a tax professional is essential to navigating Japan’s tax system and maximizing incentives.How Old Houses Japan Assists InvestorsOur team connects you with tax advisors and provides insights into tax-efficient property investments, making the process stress-free for foreign buyers.