Newsletter for September, 2025 - What Are The Taxes When You Sell Property in Japan

【Taxes When Selling Real Estate in Japan】

1. Capital Gains Tax (Income Tax + Reconstruction Tax)

Owned 5 years or less (short-term): about 39%

Owned more than 5 years (long-term): about 20%

2. Resident Tax

Charged on the profit from the sale.

Calculated together with the capital gains tax.

【Main Tax Deductions】

1. Special Deduction of up to ¥30 Million for a Primary Residence

When selling your own home (primary residence), you can deduct up to ¥30 million from your capital gain.

Example: If your profit is ¥25 million → fully exempt from tax.

If your profit is ¥40 million → only ¥10 million is taxable.

This exemption can generally be used only once every two years.

2. Reduced Tax Rate for Long-Term Ownership (10+ Years)

If you have owned your residence for more than 10 years before selling,

the tax rate may be reduced from the usual 20% to around 14%.

This can be combined with the ¥30 million special deduction.

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