Fees and Taxes of Selling Your Home in Japan
Selling a home in Japan involves a small number of set costs and taxes. The main ones are the brokerage fee (仲介手数料), stamp duty (印紙税) on the sale contract, and capital gains tax on any profit from the sale. Resident and non-resident sellers are taxed slightly differently, and non-resident sellers usually have a portion of the sale price withheld at settlement, then reconciled through a tax return the following year.
Selling your Tokyo Home at a glance
| Cost | Typical amount | Notes |
|---|---|---|
| Brokerage fee (仲介手数料) | Sale price × 3% + ¥60,000, plus 10% consumption tax | Regulated maximum on sales above ¥4 million |
| Stamp duty (印紙税) | Varies by price band; reduced rates apply | Paid on the sale contract; reduced rates run to 31 March 2027 |
| Capital gains tax | 20.315% (held over 5 years) or 39.63% (held 5 years or less), residents | Charged on the profit only, not the sale price |
| Non-resident withholding | 10.21% of the sale price | Withheld by the buyer at settlement; reconciled by tax return |
| Judicial scrivener fee (司法書士) | Varies | Mainly to cancel a mortgage registration, where applicable |
| Other costs | Varies | e.g. cleaning; any overseas-lender charges |
Figures are general and subject to change; individual circumstances vary. Always confirm details with a licensed professional.
How is capital gains tax calculated when you sell?
Capital gains tax applies only to the profit from the sale, not the whole sale price. The gain is the sale price less the acquisition cost and transfer expenses:
Capital gain = sale price − (acquisition cost + transfer expenses)
Deductible costs include the purchase price and related expenses, building depreciation, improvement costs, and selling costs (agent fee, stamp duty and similar). The rate depends on how long the property was held, measured as at 1 January of the year of sale:
- Held 5 years or less (short-term): 39.63% for residents (30.63% income tax + 9% residential tax); 30.63% for non-residents.
- Held more than 5 years (long-term): 20.315% for residents (15.315% income tax + 5% residential tax); 15.315% for non-residents.
- A primary residence held more than 10 years may qualify for a reduced rate: 14.21% on the first ¥60 million of gain, and 20.315% above that.
Capital gains tax applies to individuals; companies are taxed under separate rules.
What do non-resident sellers pay?
Non-resident sellers pay capital gains tax on any profit but not residential tax (住民税), so the applicable rates are the income-tax portions above – 15.315% (long-term) or 30.63% (short-term).
At settlement, the buyer generally withholds 10.21% of the sale price and pays it directly to the tax office, passing the balance to the seller. The seller then files a final tax return the following year, usually between 16 February and 15 March. The withheld amount is credited against the final capital gains tax: any excess is refunded (typically around May or June) and any shortfall is paid. If the property still carries a mortgage with an overseas lender, additional charges may apply under that lender’s rules.
What deductions and exemptions can reduce the tax?
Legitimate selling costs can be deducted when working out the gain, including the agent fee, stamp duty, address-change fees, depreciation and other transaction costs, and preparation or renovation costs incurred in order to sell may also qualify.
A primary-residence exemption (居住用財産の3,000万円特別控除) can exclude the first ¥30 million of gain on a main home where conditions are met: for example, the property was your primary residence, the sale takes place within three years of moving out, the buyer is not a relative or close associate, the exemption has not been used in the previous two years, and the property is not a second home or investment property. This can reduce, or even remove, the tax due where it applies.
FAQ
Who pays the seller brokerage fee when selling in Japan?
Seller and buyer brokerage fees are separate in Japan, and each side owes fees to the agent they are working with. It is capped at (sale price × 3% + ¥60,000) plus consumption tax on sales above ¥4 million.
Do non-residents pay tax when selling property in Japan?
Yes. Non-resident sellers pay capital gains tax on any profit, 15.315% or 30.63% depending on the holding period. The buyer usually withholds 10.21% of the sale price at settlement, which is reconciled through the seller’s tax return.
How is the five-year holding period measured in Japan?
It is measured as at 1 January of the year the property is sold, not the exact date of sale.
Is there tax relief when selling my main home in Japan?
A primary-residence exemption can remove up to ¥30 million of gain from capital gains tax where the conditions are met.
Ready to sell your Tokyo property?
Housing Japan’s selling agents can talk through the costs for your specific property and arrange a free valuation. Get in touch bellow to discuss your sale.
