- November 7, 2025
- BELONGING JAPAN
Understanding Japan property tax—especially the Fixed Asset Tax (Kotei Shisan-Zei)—is essential for anyone who owns real estate in Japan. This local tax applies to land, buildings, and other fixed assets owned as of January 1 each year, and even foreign property owners must pay it. This guide, supervised by Certified Financial Planner® Yukako Yamazaki, explains how the tax is calculated, payment methods, and key exemptions, based on official data from the Ministry of Internal Affairs and Communications (MIC) and other government agencies.
Profile of Writer
Yukako Yamazaki
Representative of FP Office MIRAI;
Experienced as a Registered Customs Specialist, a bank teller, and transitioned to the path of a financial planner. Founded the financial planning office “FP Office MIRAI” in 2022.
With the motto “Changing the future through reviewing the household budget,” actively engages in household budget consultations, financial article writing, and book supervision, etc.
1st grade Certified Skilled Professional of Financial Planning, Certified Financial Planner®.
Table of Contents
Chapter 1: Japan Property Tax
In Japan, different types of taxes apply to real estate depending on the situation. Here’s a simple overview of when you need to pay Japan property tax and what kinds of taxes are involved:
1. When You Purchase Real Estate
When you purchase real estate, you will pay these taxes.
| English | Kanji | Romaji |
|---|---|---|
|
Stamp Duty |
印紙税
|
Inshi-Zei
|
|
Registration and License Tax |
登録免許税 |
Touroku-Menkyo-Zei |
|
Real Estate Acquisition Tax |
不動産取得税 |
Fudōsan shutokuzei |
These taxes confirm your legal ownership and are handled during property registration.
2. While You Own Real Estate
When you own land or buildings, two main taxes apply annually:
| English | Kanji | Romaji |
|---|---|---|
|
Fixed Asset Tax |
固定資産税 |
Kotei Shisan-Zei |
|
City Planning Tax |
都市計画税 |
Toshi Keikaku-Zei |
These are collected by your municipal government, usually four times a year.
3. When You Inherit or Are Given Real Estate
When you inherit or are given real estate, you will pay these taxes.
| English | Kanji | Romaji |
|---|---|---|
|
Gift Tax |
贈与税 |
Zōyo-Zei |
|
Inheritance Tax |
相続税 |
Sōzoku-Zei |
Related Post
These are managed by the National Tax Agency (NTA).
4. When You Sell Real Estate
If you sell your property, you must report and pay taxes on any capital gains:
| English | Kanji | Romaji |
|---|---|---|
|
Income Tax |
所得税 |
Shotoku-Zei |
|
Resident Tax |
住民税 |
Jūmin-Zei |
Key Takeaways
Japan property tax applies to anyone who owns or transfers real estate in Japan, including foreigners.
Local municipalities handle property ownership taxes, while national taxes apply to acquisition, inheritance, and sale.
Always confirm with official resources such as your city or ward office, the Ministry of Internal Affairs and Communications, or the National Tax Agency for the most accurate information.
Chapter2: What is Fixed Asset Tax?
When discussing Japan property tax, one of the most important components to understand is the Fixed Asset Tax (固定資産税, Kotei Shisan-zei). This is a local tax imposed annually on people who own land, buildings, or depreciable assets in Japan as of January 1 each year. The tax is levied by your municipal government and serves as a stable source of funding for public services.
Overview of Fixed Asset Tax in Japan
The Fixed Asset Tax is based on the assessed value of the property, which is determined by the local tax office. The Ministry of Internal Affairs and Communications (MIC) oversees the standard rules for assessment and collection under Japan’s Local Tax Act.
Official reference: MIC – Local Tax System (総務省 地方税制度)
If you buy or construct a house or building, you’ll start receiving a Fixed Asset Tax notice (納税通知書) the following year. The notice usually arrives between April and May, although this may vary depending on the municipality.
Even if you sell or transfer ownership after January 1, you’re still responsible for paying the tax for that year—since ownership status on January 1 determines liability.
Uses of Fixed Asset and City Planning Taxes
In addition to Fixed Asset Tax, properties located within urban planning areas are also subject to the City Planning Tax (都市計画税, Toshi Keikaku-zei). Both taxes are often listed together on the same notice. Fixed Asset Tax helps fund public services like schools, parks, and welfare programs. The City Planning Tax helps pay for land used in building or moving public facilities.
Chapter 3: Properties Subject to Fixed Asset Tax
When you think of Fixed Asset Tax on real estate, you might imagine residential land or buildings, like a home. However, the tax also applies to various types of property. For land, it includes not only residential areas but also rice fields, farms, forests, and ranches. Buildings are also subject to the tax, including not just homes, but shops, factories, warehouses, and other types of buildings.
For Foreign Property Owners
Foreigners who own land or buildings in Japan are legally required to pay Fixed Asset Tax, regardless of residency status. The determining factor is ownership as of January 1.
Even if you move abroad, as long as your name remains on the property registry, you will continue to be taxed.
If you live outside Japan, you must appoint a tax agent (納税管理人, Nōzei Kanrinin) to manage your tax obligations. This representative will receive tax notices and handle payments on your behalf.
Chapter4: How to Calculate Fixed Asset Tax and City Planning Tax
Both Fixed Asset Tax and City Planning Tax are calculated by multiplying the taxable base amount by the tax rate. The taxable base amount is determined by calculating the fixed asset value for land and buildings separately and then combining the values.
How to Determine the Taxable Base Amount
Residential land: About 70% of the publicly announced land price
Buildings: The reconstruction cost of the building, adjusted by a certain rate based on its age
Fixed Asset Tax Calculation
Fixed Asset Tax = Taxable base amount × 1.4% (standard tax rate)
City Planning Tax Calculation
City Planning Tax = Taxable base amount × 0.3% (maximum rate)
The fixed asset value is reassessed every three years.
Chapter5: Tax Reductions for Fixed Asset Tax
Fixed Asset Tax and City Planning Tax are usually based on the taxable base amount. However, there are reductions for residential land and new homes.
a. Residential Land Tax Reduction (Fixed Asset Tax & City Planning Tax)
This reduction lowers the taxable base for residential properties, including homes and apartments. See the table below for details.
| Land Area per Unit | Fixed Asset Tax | City Planning Tax |
|---|---|---|
|
Up to 200㎡ |
Taxable base × 1/6 |
Taxable base × 1/3 |
|
Over 200㎡ |
Taxable base × 1/3 |
Taxable base × 2/3 |
b. Tax Reduction for Newly Built Homes
This tax reduction applies to homes built by March 31, 2026. The details differ for standard homes and long-term quality homes. See the table below for details.
| No. | Type of Home | Tax Reduction Period | Tax Reduction Rate | Eligible Floor Area |
|---|---|---|---|---|
|
No.1 |
Standard Homes (excluding No.2) |
3 years |
50% |
Up to 120㎡ of the residential floor area (If it exceeds 120㎡, the reduction applies to 120㎡ only) |
|
No.2 |
Fire-Resistant Homes with 3 or More Floors |
5 years |
||
|
No.3 |
Standard Long-Term Quality Homes (excluding No.4) |
5 years |
||
|
No.4 |
Fire-Resistant Long-Term Quality Homes with 3 or More Floors |
7 years |
To receive these special provisions, you must submit a declaration to the local municipality by January 31 of the year following the construction or purchase of the building. Note that the taxable base will not automatically be reduced, and the fixed asset tax will not be automatically reduced.
Important Note:
Losing Tax Reduction for Vacant Houses
If your property is marked as a “Specified Vacant House, 特定空家” by the local government because it’s poorly maintained or at risk of collapsing, you won’t get the residential land tax reduction. Without the reduction, your fixed asset tax could increase by up to six times. So, if you own vacant land, make sure to take care of it regularly.
Related Post
Chapter6: Fixed Asset Tax Payment Schedule and Methods
Payment Schedule
Pay the fixed asset tax by the deadlines on the payment slip your municipality sends. Each municipality sets its own deadlines, but generally, you’ll make payments four times a year. You can also pay the entire year’s tax at once, but make sure to pay by the first deadline. If you miss the deadline, you may have to pay a late fee.
Payment Methods
You can pay fixed asset tax using several methods. The main options are:
Bank counter
Convenience store
Smartphone payment (QR code on the payment slip)
Credit card
Pay-easy
eLTAX (local tax portal system)
Paying from home is convenient, but some methods may charge a fee or offer rewards like points. It’s a good idea to check the options before paying.
Chapter7: FAQ
1. Who needs to pay property tax in Japan?
Anyone who owns real estate (land or buildings) in Japan as of January 1 each year must pay Japan property tax, regardless of nationality or residency status. Even foreign residents and overseas investors are liable for the tax.
2. How is Japan property tax calculated?
Property tax is generally 1.4% of the assessed value of the property. This value is determined by the municipal government based on official land and building assessments. In urban areas, an additional City Planning Tax (up to 0.3%) may apply.
3. When and how do I pay Japan property tax?
Tax bills are usually sent out in April or May, with payment deadlines divided into four installments (typically June, September, December, and February). Payments can be made at:
Local city or ward offices
Convenience stores
Japanese banks and ATMs
Online via municipal websites or internet banking
4. Can I pay Japan property tax from overseas?
Yes. Property owners living abroad must appoint a tax agent (納税管理人, nōzei kanrinin) in Japan to handle tax payments and correspondence. Consult your local city office for required documents.
5. What happens if I don’t pay Japan property tax?
Late payments may incur penalties and interest, and the local government has the authority to seize property or assets if taxes remain unpaid. Timely payment is essential to avoid legal complications.
6. Are there any tax exemptions or reductions?
Yes. Certain newly built homes, small-scale residential plots, and disaster-affected properties may qualify for temporary tax reductions. Check your municipal office website for details.
Chapter8: Summary
If you own property on January 1st, you must pay the fixed asset tax. Properties in city planning areas also have a city planning tax. These taxes apply to land, buildings, and depreciable assets. This guide focuses on residential land and houses. There are tax relief options available, so be sure to apply to your local municipality if you qualify.
Foreigners who own property in Japan must pay these taxes, even if they don’t live in Japan. If you can’t pay the tax yourself, you need to appoint a tax representative.
If your property is left unmanaged and becomes a “Specified Vacant House,” you will lose your tax relief, and the tax will increase. Be sure to manage vacant properties carefully.
*This article is for general informational purposes and does not constitute financial, tax, or legal advice. Tax regulations and rates are subject to change. Readers should confirm current information with their local municipal office or the Ministry of Internal Affairs and Communications.
Belonging JAPAN is not affiliated with any financial institution or government agency.
Tax procedures, deadlines, and regulations are accurate as of October 2025, but may change. Please confirm the latest details before filing.
References
Source: All Japan Real Estate Association
Source: Ministry of Internal Affairs and Communications
Source: Ministry of Land, Infrastructure, Transport and Tourism
