Stamp Duty

A one-time tax paid on the sales contract itself, based on the contract price. It is a fixed amount that increases in steps as the price rises — for example, a few hundred yen for a low-priced property, up to around 60,000 yen for very high-priced properties. This is paid by purchasing a revenue stamp and affixing it to the contract.

Registration and License Tax

Paid when the property's ownership is officially registered in your name. The rate is generally 1.5% of the land's assessed value and 2.0% of the building's assessed value (lower for brand-new buildings). This is the price of having your ownership legally recorded and protected.

Real Estate Acquisition Tax

A one-time tax charged by the prefecture a few months after your purchase, based on the assessed value (not the sale price) of the land and building. The standard rate is 3%.

Why it matters for foreign buyers: Two reduction measures can significantly lower this tax — a building deduction (based on the construction date) and a land tax credit — but both generally require the land to have a residential building on it. Land purchased without a building usually does not qualify.

Real Estate Agent Brokerage Fee

Not a tax, but usually the largest single cost after the property price itself. The legal maximum is 3% of the sale price plus 60,000 yen, plus consumption tax — for example, around 1.4 million yen on a 40 million yen property. This fee compensates the real estate agent for finding the property, negotiating, and handling the transaction paperwork.

Judicial Scrivener Fee

A licensed judicial scrivener (shiho shoshi) handles the legal registration of your ownership at the Legal Affairs Bureau. Fees are not fixed by law and vary by scrivener, property, and complexity, but typically range from around 60,000 to 150,000 yen. This is a practical, unavoidable cost for almost every purchase, separate from the registration tax itself.

Property Tax (Fixed Asset Tax)

Charged every year to whoever owns the property as of January 1st, at a standard rate of 1.4% of the assessed value. The municipality sends a notice each spring, and it is usually paid in four installments.

Important for land-only owners: If a residential building stands on the land, the taxable value of the land is reduced to as little as one-sixth. Vacant land does not receive this reduction, which is one reason undeveloped land can have a surprisingly high annual tax bill relative to its use.

City Planning Tax

A smaller annual tax (up to 0.3%) that applies to properties within designated urbanization areas, billed together with the property tax. Like property tax, residential land receives a reduction (to one-third of the assessed value).

New-Build Reduction (Not Always Applied)

Newly constructed homes may qualify for a temporary measure that halves the building's property tax for 3 years (5 years for certain fire-resistant structures, up to 7 years for certified long-life quality homes). This is a separate benefit from the residential land reduction above, and requires meeting specific construction standards.

When you buy a condominium unit, you are not only buying the unit itself — you are also buying a proportional share of the land the building stands on. This land share is taxed separately from, but added to, your unit's building value.

Both the land share and the building portion receive their respective reductions (the land share gets the residential land reduction; the building does not), and both are combined when calculating your annual property tax and city planning tax bill.

Capital Gains Tax (When You Sell)

If you sell at a profit, the gain is taxed. Properties held more than 5 years are taxed at a lower long-term rate (20.315%); 5 years or less is taxed at a higher short-term rate (39.63%). A primary residence may qualify for a special 30 million yen deduction from the taxable gain.

Inheritance Tax

If the property passes to heirs, inheritance tax may apply based on the assessed value at the time of death. A special exemption for small residential land can substantially reduce the taxable value of a family home. Registering the inherited property in the heir's name has been mandatory since April 2024.

Gift Tax

If you transfer the property to someone during your lifetime, gift tax may apply. The amount owed depends heavily on which taxation system is chosen (standard calendar-year taxation, or a system that settles the tax at the time of a future inheritance), so this is an area where advance planning makes a real difference.