Two systems, two separate obligations

Japanese tax is levied by the national government and by local government, and the two do not share paperwork. An owner who lives outside Japan meets both.

Why a representative is needed at all, and why one appointment does not cover all three authorities, is set out in the tax paperwork nobody mentions before you buy. This guide is about the question that follows it: whether any of those appointments can be avoided.

The local tax exemption

Local tax legislation allows a municipality to dispense with the requirement where it accepts that collection will not be impeded without a representative. The exemption is not automatic and it is not universal. It is a recognition the authority grants on application, on its own criteria.

In practice, the condition that usually satisfies it is payment by direct debit from a bank account in Japan. If the tax will be collected automatically, the authority has less need for a person in Japan to receive the demand and settle it.

The bank account problem

Here the route narrows. Opening a Japanese bank account in your own name as a non-resident is difficult, because banks apply strict identity and anti-money-laundering checks to people without a Japanese address.

Some municipalities therefore accept a debit from an account held by somebody else, such as a relative living in Japan or a company acting for you. Whether that is accepted, and on what terms, is decided by each municipality, and the answer in one city tells you nothing about the next.

The application

Setting up the debit does not by itself grant the exemption. A formal application has to be made to the authority, usually with identity documents such as a passport, and some authorities ask for evidence of your overseas address with a Japanese translation.

Two further points. Acquisition tax is levied by the prefecture, not the municipality, so an exemption granted by the city does not reach it. And the exemption covers collection. It does not change the fact that official correspondence is written in Japanese and addressed to whoever the authority has on record.

Where the exemption stops: national tax

This is the part most often missed. Being excused from appointing a representative for local tax has no effect on national tax.

If you let the property, the rent is Japanese income and an annual return is required. If you sell, the gain is taxable in Japan and a return settles it. In either case, where you have no address in Japan, national tax legislation requires you to appoint a representative to handle the filing, the payment and any refund.

Since a 2021 amendment, in force from January 2022, the tax office can also act where nobody has been appointed. It can set a deadline for the notification, and it can approach a party in Japan connected to the matter and designate them to take the role. Leaving the position empty is not a way of staying outside the system.

A representative is not the same as an accountant

The representative files and pays. Preparing a tax return or advising on a tax position for a fee is reserved to certified tax accountants. A return on rental income or a sale therefore usually involves both: a representative in the formal role, and an accountant preparing what is filed.

Withholding, and why the refund needs a filing

Readers from the United States will recognise the structure, because it resembles FIRPTA. Japan collects tax at source on certain payments to non-residents, and settles the real figure later.

• On a sale, the buyer generally withholds 10.21 per cent of the price and remits it. The exception is a sale at or below one hundred million yen to an individual buying it as a home for themselves or a relative.
• On rent, the payer generally withholds 20.42 per cent. The exception is an individual tenant renting the property as a home for themselves or a relative.

The withholding is tax paid in advance, not the final tax. On a sale it is calculated on the price, while the actual tax is calculated on the gain, so the amount withheld often exceeds what is owed. The difference comes back only through a return filed in Japan, which brings you back to the national tax representative. How this plays out at the point of sale is covered in selling Japanese property from abroad.

A reporting duty that widened in April 2026

Separate from tax altogether, the foreign exchange legislation requires a non-resident who acquires Japanese real estate to report the acquisition to the Minister of Finance, through the Bank of Japan, within twenty days.

Until March 2026, an acquisition for the buyer's own residence was outside that duty. From 1 April 2026, acquisitions of the property itself for residential, office or non-profit use were brought within it, as were acquisitions from another non-resident. The report now also asks for the purpose of the acquisition and whether the seller is resident.

Three practical points follow.

• The duty applies regardless of price or size
• A second home or holiday house was never treated as residential for this purpose
• The report can be prepared and submitted by a representative resident in Japan, including online

Failing to report is an offence under the legislation, and it is the kind of obligation that is easy to miss because nothing arrives in the post to prompt it.

The register asks for more as well

Two changes to registration practice point the same way.

Since April 2024, an owner who lives outside Japan must register a contact in Japan, or record that there is none, and those details appear on the register. And as part of a wider government review of land acquisition, buyers are being required to state their nationality when ownership is registered. That information is held by the authorities and does not appear on the public register. What a registration from abroad involves is set out in buying a Japanese house without being in Japan.

What this adds up to

The local tax exemption is worth knowing about. For an owner who keeps a property purely for their own use, has no Japanese income and can arrange a debit the municipality will accept, it can reduce what needs to be appointed.

For anyone who lets the property, or will one day sell it, it does not remove the need for somebody in Japan. National tax filings, withholding refunds, the foreign exchange report, the registered contact and the correspondence that arrives in Japanese all still need a person.

The most efficient arrangement is usually not the one with the fewest appointments. It is the one where a single point of contact knows about all of them. Splitting the roles between several people, none of whom sees the whole picture, is how a deadline gets missed. One such case is set out in the bill that arrives five months after you thought you were finished.