Japanese Tax Blog in English

日本の税務情報を英語で書くブログ by みなと国際会計事務所

Buying Property In Japan and its income tax filing

time 2015/05/06

皇居さくら

It seems buying properties in Tokyo is becoming popular idea recently. Thanks to interests from foreign investors in addition to historically low interest rate, the price of new apartment has gone up almost to a double in the past few weeks. Now price of the new  norm for a new apartment is 7,000,000 yen per 3.3 square meters. It is actually astounding.   Probably because of the boom, we recentlyreceive several inquiry from foreign investors.

One of the most frequently asked question is why am I taken 10% from my rent income as withholding tax and how can I get them back?

The answer is very simple. You need to file your tax return by March 15th of the next year and you can get the tax refund back.

Because you can claim depreciation cost of its building part (the total cost need to be split between land part and building part) over years and mortgage interest, if any, you are most likely to get most of the withholding tax back, if not all of them.

To file your tax return, you need to assign a tax agent for you because you are not a Japan resident. The agent can be your friend, property management company or us, of course. It can be either a natural person or legal person.

 

Another rule which may sound strange is you will be deducted 10% withholding tax when you sell it. Of course, you will be able to get the tax back if it was sold at loss. You also need to file your tax return by Mach 15 of the next year to to the year that you sold your property.

 

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