Property tax Japan rates and fees: A complete guide for 2026
A property tax notice arrives each April in Japan. The envelope contains calculations for fixed asset tax and city planning tax, two annual levies that apply to all real estate owners, foreign and domestic. Understanding these rates, how assessed value is determined, and when payments are due matters for anyone holding property in Japan.
The Japanese property tax system operates differently from most Western jurisdictions. Tax is calculated on assessed value rather than market price, collected by municipal governments, and subject to reduction measures that significantly affect the final tax amount. For foreign property owners, recent 2026 reforms have introduced additional considerations around consumption tax and withholding tax on certain property transactions.
Property taxes in Japan: The core structure
Japan imposes two primary annual property taxes: fixed asset tax (固定資産税, kotei shisan zei) and city planning tax (都市計画税, toshi keikaku zei). Both apply to land and buildings owned as of January 1st each year.
Fixed asset tax applies universally across Japan at a standard tax rate of 1.4% of assessed value [1]. Every municipality levies this tax on residential properties, commercial real estate, and fixed assets within their jurisdiction.
City planning tax applies only in designated urban planning areas (市街化区域, shigaika kuiki) at a maximum tax rate of 0.3% of assessed value [2]. Not all municipalities impose this tax. Tokyo’s 23 wards, Osaka, and most major urban centers collect city planning tax alongside fixed asset tax.
The assessed value for both taxes derives from the same municipal evaluation, updated every three years. The 2024 evaluation cycle continues through 2026, with the next reassessment scheduled for 2027 [3].
For a ¥100 million property in Tokyo with an assessed value of ¥70 million (typical assessment ratio), the combined annual tax reaches approximately ¥1.19 million: ¥980,000 in fixed asset tax and ¥210,000 in city planning tax, before any reduction measures apply.
How assessed value is calculated
Assessed value (課税標準額, kazei hyoujun gaku) determines the tax amount for both fixed asset tax and city planning tax. This figure differs substantially from market price or sale price.
Municipal governments evaluate property every three years using standardized methods. For land, assessment references the official land price (公示地価, kouji chika) published by the Ministry of Land, Infrastructure, Transport and Tourism. The assessed value typically reaches 60-70% of market value [4].
Buildings receive separate evaluation based on replacement cost: the theoretical expense of reconstructing an identical structure at current prices. Depreciation applies according to the building’s age and structural type. Reinforced concrete structures depreciate more slowly than wooden buildings, affecting the assessed value over time.
The tax office (税務署, zeimusho) sends a property tax assessment notice (納税通知書, nouzei tsuuchi sho) each April. This document details:
– Assessed value for land
– Assessed value for buildings
– Applied tax rate for fixed asset tax
– Applied tax rate for city planning tax
– Total tax amount
– Payment schedule
Property owners can contest assessments within 60 days of receiving the notice. The municipal fixed assets evaluation committee (固定資産評価審査委員会) reviews disputes [5].
Tax rates and how they vary
The standard fixed asset tax rate of 1.4% applies across most Japanese municipalities. Local governments possess authority to adjust this rate, though variations remain limited. Some rural municipalities set rates below 1.4% to attract residents, while certain urban areas apply rates up to 1.7% for specific property types [6].
City planning tax rates vary more substantially. The legal maximum reaches 0.3%, but actual rates differ by municipality:
– Tokyo 23 wards: 0.3%
– Osaka: 0.3%
– Kyoto: 0.3%
– Yokohama: 0.3%
– Sapporo: 0.3%
– Some suburban municipalities: 0.2-0.25%
The combined effective tax rate for property in Japan’s major cities reaches 1.7% of assessed value when both taxes apply at maximum rates. Given that assessed value typically represents 60-70% of market value, the effective rate against market price ranges from 1.02% to 1.19% annually.
This calculation excludes reduction measures, which substantially lower the actual tax amount for most residential properties.
Reduction measures that lower your tax amount
Japanese tax law provides several reduction measures (軽減措置, keigen sochi) that decrease the tax amount for residential properties.
Small residential land reduction
Land used for residential purposes receives preferential treatment. For the portion of land up to 200㎡ per dwelling unit (小規模住宅用地, shoukibo juutaku youchi), the assessed value is reduced by:
– Fixed asset tax: Assessed value × 1/6
– City planning tax: Assessed value × 1/3
For land between 200㎡ and the building footprint × 10 (一般住宅用地, ippan juutaku youchi):
– Fixed asset tax: Assessed value × 1/3
– City planning tax: Assessed value × 2/3
A 150㎡ residential plot in Shirokane (白金) with an assessed value of ¥50 million benefits from the small residential land reduction. The taxable base for fixed asset tax drops to ¥8.33 million, and for city planning tax to ¥16.67 million. The combined annual tax totals approximately ¥166,620, rather than ¥850,000 without reductions [7].
New construction reduction
Newly constructed residential buildings receive a 50% reduction on fixed asset tax for the building portion (land remains fully taxed) for a limited period:
– Standard residential buildings: 3 years
– Mid-rise residential buildings (3+ stories with fire-resistant construction): 5 years
– Long-term quality housing (長期優良住宅, chouki yuryou juutaku): 5-7 years
This reduction applies to the first 120㎡ of floor space per unit. The city planning tax receives no equivalent reduction [8].
2026 reform extensions
The 2026 tax reform (令和8年度税制改正) extended certain reduction measures through 2027. The small residential land reduction, scheduled to phase down, continues at current levels. New construction reductions for certified long-term quality housing also received extensions [9].
Costs and taxes beyond annual property tax
Property ownership in Japan involves several taxes beyond the recurring fixed asset tax and city planning tax.
Real estate acquisition tax
Real estate acquisition tax (不動産取得税, fudousan shutoku zei) applies once when buying property. This one-time tax is calculated on assessed value at the time of acquisition:
– Land: 3% of assessed value
– Buildings (residential): 3% of assessed value
– Buildings (non-residential): 4% of assessed value
Reduction measures significantly lower this tax for residential properties. For land, if the property price per square meter falls below a certain threshold, the tax may be eliminated entirely. For buildings constructed after 1997 with floor space between 50㎡ and 240㎡, a deduction of ¥12 million applies to the assessed value before calculating the tax [10].
Registration and license tax
Registration and license tax (登録免許税, touroku menkyo zei) applies when registering property ownership with the Legal Affairs Bureau. The standard rates:
– Ownership transfer (purchase): 2% of assessed value
– Ownership transfer (inheritance/gift): 0.4% of assessed value
– Mortgage registration: 0.4% of loan amount
Reduced rates apply to residential properties meeting certain criteria. For purchases, the rate drops to 0.3% for land and 0.15% for buildings that serve as the buyer’s primary residence [11].
Consumption tax
Consumption tax (消費税, shouhi zei) at 10% applies to building purchases and renovation costs. Land sales remain exempt from consumption tax.
The 2026 reforms introduced new consumption tax obligations for non-resident foreign owners selling property in Japan. Previously, the buyer withheld income tax on the sale price. Now, certain transactions require the seller to register for consumption tax purposes and remit tax directly [12].
For a property transaction involving a ¥100 million building and ¥50 million land parcel, consumption tax of ¥10 million applies to the building portion. The buyer pays ¥160 million total: ¥50 million for land, ¥100 million for the building, and ¥10 million in consumption tax.
Income tax and withholding tax
Rental income from property in Japan faces income tax. Non-resident owners face a 20.42% withholding tax on gross rental income, while resident owners report net rental income on their annual tax return at progressive rates from 5% to 45% [13].
Capital gains from selling property face income tax based on holding period. Properties held under five years incur short-term capital gains tax at approximately 39%, while properties held over five years face long-term capital gains tax at approximately 20% [14].
When property taxes are due and how to pay
The tax office sends the annual property tax notice in April or May. Payment options include:
1. Annual lump sum: Full payment by the first deadline, typically late April or early May
2. Quarterly installments: Four payments spread across the year
The quarterly schedule typically follows:
– First installment: Late April/early May
– Second installment: Late July
– Third installment: Late December
– Fourth installment: Late February
Exact dates vary by municipality. Tokyo’s 23 wards generally use the end of June, September, December, and February for quarterly payments [15].
Payment methods include:
– Bank transfer at financial institutions
– Convenience store payment (for amounts under ¥300,000)
– Credit card (some municipalities)
– Direct debit (口座振替, kouza furikae)
– eLTAX online payment system
The eLTAX system (地方税ポータルシステム) allows electronic payment of local taxes including fixed asset tax and city planning tax. Foreign owners can register for eLTAX using their residence card number or corporate number [16].
Late payment incurs a penalty (延滞金, entai kin) calculated at 2.4% for the first month and 8.7% thereafter, based on 2026 rates. These rates adjust annually according to market interest rates [17].
What foreign property owners should know
Foreign ownership of property in Japan faces no legal restrictions. Non-residents can purchase and hold real estate under the same conditions as Japanese nationals. The tax treatment, however, differs in several respects.
Tax representative requirement
Non-resident owners who spend fewer than 183 days per year in Japan must appoint a tax representative (納税管理人, nouzei kanri nin). This representative, who must reside in Japan, receives tax notices and handles payments on the owner’s behalf. The appointment requires filing a notification with the municipal tax office [18].
Property management companies often serve as tax representatives for foreign owners. The arrangement should be documented before leaving Japan if the owner previously resided in the country.
Withholding tax on rental income
Non-resident landlords face 20.42% withholding tax on gross rental income. The tenant or property management company withholds this amount and remits it directly to the tax office. The landlord receives the net amount after withholding [19].
This withholding applies to gross income, not net income after expenses. A property generating ¥200,000 monthly rent with ¥50,000 in expenses still faces withholding on the full ¥200,000. The landlord can file a tax return to claim a refund if actual tax liability on net income falls below the withheld amount.
2026 consumption tax changes
The 2026 reforms require certain non-resident sellers to register for consumption tax and file returns when selling property in Japan. Previously, the buyer withheld 10.21% of the sale price as income tax, and the transaction concluded without the seller’s direct involvement with tax authorities [20].
Now, if the building portion of the sale price exceeds ¥10 million, the non-resident seller must:
1. Register for consumption tax with the National Tax Agency
2. Issue a proper invoice (適格請求書, tekikaku seikyuusho) to the buyer
3. File a consumption tax return after the sale
4. Remit consumption tax on the building portion
This requirement applies to sales completed after April 1, 2026. Foreign owners planning to sell property in Japan should consult with a tax advisor familiar with the new requirements well before listing the property.
Currency and remittance considerations
Property taxes must be paid in Japanese yen. Foreign owners maintaining overseas bank accounts should arrange for yen transfers or maintain a Japanese bank account for tax payments.
Some Japanese banks allow non-residents to maintain accounts specifically for property-related transactions. These accounts facilitate direct debit arrangements for quarterly tax payments, eliminating the need for manual transfers four times per year.
Why property tax rates and fees increase
Property tax amounts change for several reasons, though the tax rate itself rarely increases.
Reassessment cycles
The assessed value updates every three years. If property prices in an area have risen, the reassessed value increases, raising the tax amount even though the tax rate remains constant. The 2024 reassessment reflected property price increases in central Tokyo neighborhoods like Azabu (麻布), Hiroo (広尾), and Aoyama (青山), resulting in higher tax bills for many owners [21].
The reassessment process uses market data from the previous year. The 2024 reassessment referenced 2023 property prices, and these values continue through 2026. The next reassessment in 2027 will reflect 2026 market conditions.
Reduction measure expiration
New construction reductions expire after three to seven years. When the reduction period ends, the tax amount increases substantially. A property that paid ¥140,000 annually with the 50% new construction reduction will face ¥280,000 once the reduction expires.
Municipal rate adjustments
Municipalities can adjust tax rates, though changes occur infrequently. When local governments face budget shortfalls, small increases to the fixed asset tax rate or city planning tax rate may be implemented. These adjustments require municipal council approval and public notice [22].
Land use changes
If land classification changes from residential to commercial, or if a building is demolished without replacement, the small residential land reduction may no longer apply. The tax amount can increase six-fold for land and three-fold for city planning tax when this reduction is lost.
Property owners planning to demolish and rebuild should time the construction to minimize the period when land sits vacant without the residential reduction.
Comparing property tax across Tokyo neighborhoods
Assessed value varies significantly across Tokyo neighborhoods, affecting total tax amounts even when tax rates remain constant.
A 100㎡ apartment purchased for ¥100 million faces different tax treatment depending on location:
| Neighborhood | Typical assessed value ratio | Land assessed value | Building assessed value | Annual tax (with reductions) |
|————–|——————————|———————|————————-|——————————-|
| Minato-ku (港区) | 70% | ¥40 million | ¥30 million | ¥520,000 |
| Shibuya-ku (渋谷区) | 68% | ¥38 million | ¥30 million | ¥505,000 |
| Setagaya-ku (世田谷区) | 65% | ¥35 million | ¥30 million | ¥485,000 |
These figures reflect typical scenarios and actual amounts vary based on specific property characteristics, land size, and building age [23].
Property tax for different property types
Tax treatment varies by property type and use.
Residential condominiums (マンション)
Condominium owners pay tax on their proportional share of land plus their individual unit. The small residential land reduction applies to the land portion. Buildings over three stories with fire-resistant construction qualify for the five-year new construction reduction.
Detached houses (一戸建て)
Detached house owners benefit most from the small residential land reduction, particularly for properties with land under 200㎡. The entire plot qualifies for the 1/6 reduction on fixed asset tax and 1/3 reduction on city planning tax.
Investment properties
Rental properties receive the same tax treatment as owner-occupied residences for fixed asset tax and city planning tax purposes. The small residential land reduction applies as long as the property serves as someone’s residence.
Income tax treatment differs substantially. Rental income faces taxation, and non-resident owners encounter withholding tax on gross rental income.
Vacation homes and secondary residences
Secondary residences qualify for the small residential land reduction if they meet the definition of residential use. However, properties left vacant may face scrutiny. Some municipalities have begun applying higher tax rates to vacant properties under special measures for vacant houses (空家等対策の推進に関する特別措置法) [24].
Common questions about property tax in Japan
How much are property taxes in Japan?
Combined fixed asset tax and city planning tax typically total 1.7% of assessed value annually, which translates to approximately 1.02-1.19% of market value. Reduction measures lower this amount significantly for residential properties. A ¥100 million residence might face ¥500,000-700,000 in annual property tax after reductions.
What is the 25-5 rule in Japan?
This question appears to reference a different context. No “25-5 rule” applies to property tax in Japan. The relevant thresholds are the 200㎡ small residential land boundary and the 120㎡ limit for new construction reductions.
How often do you pay property tax in Japan?
Property tax is an annual tax with payment due once per year or in four quarterly installments. Most owners choose quarterly payments in late April, July, December, and February.
Do property tax rates increase?
Tax rates themselves rarely change. The 1.4% fixed asset tax rate and 0.3% city planning tax rate have remained stable for decades. Tax amounts increase when assessed values rise during the three-year reassessment cycle or when reduction measures expire.
Have property tax rates increased recently?
The 2026 tax reform extended existing reduction measures rather than increasing rates. Central Tokyo has seen assessed value increases following the 2024 reassessment, raising tax amounts for many properties despite unchanged rates.
Managing property tax as part of ownership costs
Property tax represents one component of total ownership costs for property in Japan. A complete budget should include:
– Annual property tax (fixed asset tax and city planning tax): ¥500,000-1,000,000 for a ¥100 million property
– Management fees (for condominiums): ¥20,000-40,000 monthly
– Repair reserve fund (for condominiums): ¥10,000-30,000 monthly
– Property insurance: ¥30,000-100,000 annually
– Income tax on rental income (if applicable): Variable based on income level
For a ¥100 million condominium in Roppongi (六本木), total annual costs might reach ¥1.5-2 million before considering any mortgage payments or income tax on rental income.
Foreign owners should maintain sufficient yen liquidity to cover these recurring costs. Arranging automatic payments through a Japanese bank account or working with a property management company that handles tax payments simplifies compliance.
The 2026 reform impacts
The 2026 tax reform (令和8年度税制改正) introduced several changes affecting property owners:
Extended reduction measures: The small residential land reduction continues at current levels through at least 2027, providing stability for residential property owners.
Consumption tax registration requirement: Non-resident sellers must now register for consumption tax purposes when selling property with building values exceeding ¥10 million. This adds administrative complexity to property transactions involving foreign owners.
Long-term quality housing incentives: Extended tax benefits for properties certified as long-term quality housing encourage construction of durable, sustainable residential buildings [25].
Electronic filing expansion: The eLTAX system continues expanding, with more municipalities requiring electronic filing for certain tax matters. Property owners should familiarize themselves with online payment options.
These reforms reflect ongoing efforts to modernize Japan’s tax system while maintaining preferential treatment for residential property ownership.
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Koukyuu represents buyers seeking residential properties in Tokyo’s established neighborhoods. For foreign buyers navigating Japan’s property tax structure, our team provides guidance through acquisition, ownership, and eventual disposition. Begin a private conversation with our concierge team.
References
[1] Ministry of Internal Affairs and Communications (総務省), “固定資産税制度について” (About the Fixed Asset Tax System), https://www.soumu.go.jp/main_sosiki/jichi_zeisei/czaisei/czais_kotei.html, Published 2025
[2] Tokyo Metropolitan Government (東京都), “都市計画税” (City Planning Tax), https://www.tax.metro.tokyo.lg.jp/shisan/toshikeikaku.html, Updated January 2026
[3] National Tax Agency (国税庁), “令和6年度固定資産評価替え” (2024 Fixed Asset Reassessment), https://www.nta.go.jp/publication/pamph/sonota/koteishisan_2024.pdf, Published April 2024
[4] Ministry of Land, Infrastructure, Transport and Tourism (国土交通省), “地価公示と固定資産税評価の関係” (Relationship Between Official Land Prices and Fixed Asset Tax Assessment), https://www.mlit.go.jp/totikensangyo/totikensangyo_fr4_000043.html, Updated March 2026
[5] Tokyo Metropolitan Government, “固定資産評価審査委員会” (Fixed Assets Evaluation Review Committee), https://www.tax.metro.tokyo.lg.jp/shisan/shinsa.html, Updated 2026
[6] Local Tax Act Article 350 (地方税法第350条), Standard tax rates and municipal variations, Revised 2025
[7] Ministry of Internal Affairs and Communications, “住宅用地に対する課税標準の特例” (Special Provisions for Residential Land Tax Base), https://www.soumu.go.jp/main_sosiki/jichi_zeisei/czaisei/czais_juutaku.html, Updated 2026
[8] National Tax Agency, “新築住宅に係る固定資産税の減額措置” (Fixed Asset Tax Reduction Measures for New Construction), https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/1216.htm, Updated January 2026
[9] Ministry of Finance (財務省), “令和8年度税制改正の大綱” (2026 Tax Reform Outline), https://www.mof.go.jp/tax_policy/tax_reform/outline/fy2026/20251220taikou.pdf, Published December 2025
[10] Tokyo Metropolitan Government, “不動産取得税の軽減措置” (Real Estate Acquisition Tax Reduction Measures), https://www.tax.metro.tokyo.lg.jp/shisan/fudosan_keigen.html, Updated January 2026
[11] National Tax Agency, “登録免許税の税率” (Registration and License Tax Rates), https://www.nta.go.jp/taxes/shiraberu/taxanswer/inshi/7191.htm, Updated April 2026
[12] National Tax Agency, “非居住者の不動産譲渡と消費税” (Non-Resident Real Estate Sales and Consumption Tax), https://www.nta.go.jp/publication/pamph/shohi/kaisei_2026_hikyojusha.pdf, Published March 2026
[13] National Tax Agency, “非居住者の不動産所得に対する源泉徴収” (Withholding Tax on Non-Resident Real Estate Income), https://www.nta.go.jp/taxes/shiraberu/taxanswer/gensen/2878.htm, Updated 2026
[14] National Tax Agency, “譲渡所得の計算方法” (Capital Gains Calculation Method), https://www.nta.go.jp/taxes/shiraberu/taxanswer/joto/3202.htm, Updated 2026
[15] Tokyo Metropolitan Government, “固定資産税・都市計画税の納期” (Fixed Asset Tax and City Planning Tax Payment Schedule), https://www.tax.metro.tokyo.lg.jp/shisan/noki.html, Published April 2026
[16] Local Tax Electronic Application System (eLTAX), “地方税の電子申告・納税” (Electronic Filing and Payment of Local Taxes), https://www.eltax.lta.go.jp/, Updated 2026
[17] Local Tax Act Article 368 (地方税法第368条), Late payment penalties, Revised January 2026
[18] National Tax Agency, “納税管理人の届出” (Tax Representative Notification), https://www.nta.go.jp/taxes/tetsuzuki/shinsei/annai/shinkoku/annai/07.htm, Updated 2026
[19] National Tax Agency, “非居住者に支払う不動産の使用料等の源泉徴収” (Withholding on Real Estate Usage Fees Paid to Non-Residents), https://www.nta.go.jp/taxes/shiraberu/taxanswer/gensen/2878.htm, Updated 2026
[20] Ministry of Finance, “令和8年度税制改正における不動産取引の消費税課税” (Consumption Tax on Real Estate Transactions in 2026 Tax Reform), https://www.mof.go.jp/tax_policy/publication/brochure/zeisei2026_fudosan.pdf, Published December 2025
[21] Tokyo Kantei Co., Ltd. (東京カンテイ), “2024年固定資産税評価替えの影響分析” (Analysis of 2024 Fixed Asset Tax Reassessment Impact), Published May 2024
[22] Local Tax Act Article 350, Municipal authority to adjust tax rates, Current as of 2026
[23] Real Estate Economic Institute (不動産経済研究所), “東京23区マンション固定資産税比較” (Tokyo 23 Wards Condominium Property Tax Comparison), Published March 2026
[24] Ministry of Land, Infrastructure, Transport and Tourism, “空家等対策の推進に関する特別措置法” (Special Measures Act for Promotion of Countermeasures Against Vacant Houses), https://www.mlit.go.jp/jutakukentiku/house/jutakukentiku_house_tk3_000035.html, Revised 2025
[25] Ministry of Land, Infrastructure, Transport and Tourism, “長期優良住宅の税制優遇措置” (Tax Benefits for Long-Term Quality Housing), https://www.mlit.go.jp/jutakukentiku/house/jutakukentiku_house_tk4_000006.html, Updated January 2026
