In general, the total buying cost of Japan property is about 4% to 6% of the total purchase price of the property.

Total holding cost is reasonably low. While there is income tax to the rental income, the nett payable amount is low after considering deductible expenses.

As for selling cost, the biggest item is brokerage cost of about 3% plus any capital gain tax on the property. However, many expenses are deductible, including depreciation of the build.

Buying Cost

Brokerage Fee

Brokerage fees include 3% of purchase price + ¥60,000 + consumption tax.

Acquisition Tax

A one-time payment 2 to 3 months after title registration. It is taxed against the government’s assessment of the land and the building value.

Registration & License Tax

Registration licenses are necessary in order for the purchaser to claim legal ownership of a property. Rates for registration license tax vary from 0.4% to 2% of assessment value of land and building, depending on how the transfer occurred.

Stamp Duty

Stamp duty is levied on documents of contracts and agreements, payable at title registration.

¥10M – 50M = ¥10,000
¥50M – 100M = ¥30,000
¥100M – 500M = ¥60,000

Judicial Scrivener Fee

The role of Judicial Scriveners is to assist clients in property registration procedures. Fees for engaging Judicial Scriveners vary depending on property type, assessed value, and if registration of a mortgage is required.

Holding Cost

Fixed Asset / City Planning Tax

Fixed asset tax and city planning tax are annual property taxes. The taxes are based on the government assessed value of the land and building.

Maintenance Fee / Repair Cost / Insurance

These costs cover repairs and regular redecoration of the building that is payable to the building management. Fire, and earthquake insurance are optional.

Income Tax

Rental income is classified as real estate income. The tax rate is 5% to 10% of the taxable income ranging between ¥1,000 to ¥3,300,000. A 20% withholding tax is levied on rental income which can be credited against the final tax liability amount.

Property Management Fee

Services for tenant management include sourcing for tenants, rental collection, tenant liaison, and providing assistance for regular maintenance.

Selling Cost

Brokerage Fee

Brokerage fees include 3% of purchase price + ¥60,000 + consumption tax.

Capital Gain Tax

For individuals, capital gains from the transfer of land and buildings are subjected to capital gain tax. For properties held for less than 5 years, capital gains tax is levied at 30%. Properties held for 5 years or more is levied at 15%.

Stamp Duty

Stamp duty is levied on documents of contracts and agreements, payable at title registration.

¥10M – 50M = ¥10,000
¥50M – 100M = ¥30,000
¥100M – 500M = ¥60,000

Text reproduced with permission from propertyjapan.sg

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