Tax on properties for non-resident of Japan

(At Purchase)

Property price consists of land and building portion. Consumption tax (equivalent of Value added tax or General Sales Tax) is charged on building portion. Land is free of Consumption Tax. The consumption tax rate is 8%.

(At Operation)

Corporate tenants and sole proprietor individuals have to deduct 10.21% from rent payment. For example, if the rent is 100,000 JPY, tenants have to deduct 10,210 JPY and pay only 89,790 JPY to the owner. The owner can claim the withholding tax refund by filing his tax return. He can claim all expenses related to running his/her property income.

The tax rate is as following:

0 – 1,950,000 JPY ->  5%

1,950,001 – 3,300,000 JPY -> 10%

3,300,001 – 6,950,000 JPY -> 20%

6,950,001 – 9,000,000 JPY -> 23%

9,000,001 – 18,000,000 JPY -> 33%

18,000,001 – 40,000,000 JPY -> 40%

40,000,001 –                           -> 45%

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