Japan Property Tax Guide 2026: Fixed Asset Tax, Rates & How to Pay
Japan's property tax (固定資産税) is 1.4% of the assessed value annually, with city planning tax (都市計画税) up to 0.3%. New homes get reductions for 3–5 years. Complete guide for homeowners and foreign buyers.
Japan's annual property tax (固定資産税, kotei shisan-zei) is 1.4% of the government-assessed value of your property — not the purchase price. For a home purchased at ¥40 million, the actual annual tax is typically ¥70,000–¥140,000, because the assessed value is usually 50–70% of market value. New homes receive statutory tax reductions for 3–5 years after purchase.
What this guide covers:
- Fixed Asset Tax (固定資産税): rates, assessed value, and annual payments
- City Planning Tax (都市計画税): who pays it and how much
- Real Estate Acquisition Tax (不動産取得税): one-time tax on purchase
- Registration Tax (登録免許税): paid at registration
- Tax reductions for new construction
- A worked example: ¥40 million home → annual tax calculation
- Tips for foreign homeowners
Fixed Asset Tax (固定資産税)
Rate and Basis
The standard rate is 1.4% of the "assessed value" (固定資産税評価額, kotei shisan-zei hyoka-gaku), which is reassessed every 3 years by the local municipality.
Key point: The assessed value is typically set at 50–70% of market value for residential land and buildings. This means your actual tax bill is lower than 1.4% of what you paid.
| Property Component | Assessed Value (Typical %) | Standard Tax Rate |
|---|---|---|
| Residential land | 60–70% of market value | 1.4% |
| Building (structure) | 50–60% of construction cost (depreciates) | 1.4% |
Small Residential Land Reductions
A key tax benefit: if your land is used for residential purposes, the assessed value for tax purposes is further reduced:
| Land Area | Reduction on Assessed Value |
|---|---|
| Up to 200 m² (小規模住宅用地) | Assessed value reduced to 1/6 |
| Over 200 m² (一般住宅用地) | Assessed value reduced to 1/3 |
This is a major reduction that applies to virtually all homeowners in Japan.
City Planning Tax (都市計画税)
The City Planning Tax (toshi keikaku-zei) is levied in addition to Fixed Asset Tax, but only in designated urbanization promotion areas (市街化区域, shigaika kuiki). This covers most urban and suburban areas.
- Rate: Up to 0.3% (most municipalities charge the full 0.3%)
- Basis: Same assessed value as Fixed Asset Tax
- Reduction: Land assessed value reduced to 1/3 (up to 200 m²) or 2/3 (over 200 m²) — less generous than Fixed Asset Tax
If your property is in a rural or non-urbanized area, you may not owe City Planning Tax at all.
Real Estate Acquisition Tax (不動産取得税)
This is a one-time tax paid when you acquire property. It is paid separately from the purchase price, typically 3–6 months after registration.
- Rate: 3% of the assessed value (reduced rate for residential property; standard rate is 4%)
- Basis: Official assessed value at the time of purchase
Reductions for Residential Use
Several statutory reductions lower the actual tax significantly:
| Condition | Reduction |
|---|---|
| New construction (land) | ¥4.5 million deducted from land assessed value |
| New construction (building) | ¥12 million deducted from building assessed value |
| Used home (built after 1981 seismic code) | ¥12 million deduction on building value |
In practice, most new home buyers pay little to no Real Estate Acquisition Tax after these deductions.
Registration Tax (登録免許税)
This tax is paid at the time of registration (when the property deed is transferred to your name). It is collected by the registrar of deeds (法務局).
| Transaction | Standard Rate | Reduced Rate (2026) |
|---|---|---|
| Transfer of ownership (purchase) | 2.0% of assessed value | 1.5% for residential land |
| New construction registration | 0.4% of assessed value | 0.15% for residential buildings |
| Mortgage registration | 0.4% of loan amount | 0.1% for residential mortgages |
Reduced rates apply through a temporary relief measure that has been repeatedly extended; confirm current rates at the time of purchase.
Tax Reductions for New Construction
New homes receive a temporary reduction on the building portion of Fixed Asset Tax:
| Property Type | Reduction Period | Reduction Amount |
|---|---|---|
| New detached house (up to 120 m²) | First 3 years | Building tax reduced to 1/2 |
| New condo (up to 120 m²) | First 5 years | Building tax reduced to 1/2 |
| Long-term quality housing (長期優良住宅) | First 5–7 years | Building tax reduced to 1/2 |
Note: The reduction applies only to the building portion, not the land portion.
Free Calculator
Enter your salary and get your recommended rent budget — with comparisons across 8 Japanese cities.
Try the Rent Affordability Calculator →Payment Schedule
Property taxes are paid in 4 installments per year. The municipality sends a tax notice (nozei tsuchi-sho) in late May or June each year.
| Installment | Typical Due Date |
|---|---|
| 1st | End of June |
| 2nd | End of September |
| 3rd | End of December |
| 4th | End of February (following year) |
You can also pay the full year in one lump sum with the first installment. Payment methods include bank transfer, convenience store payment, and increasingly, credit card or QR code payment via municipal apps.
Worked Example: ¥40 Million Home
Let's calculate the annual property tax for a typical suburban home:
Property details: New detached house, ¥40 million purchase price, land 150 m², building 100 m²
Step 1: Assessed Values
| Component | Market Value | Assessed Value Rate | Assessed Value |
|---|---|---|---|
| Land (150 m²) | ¥20 million | ~65% | ¥13 million |
| Building | ¥20 million | ~55% | ¥11 million |
Step 2: Fixed Asset Tax
Land (small residential land reduction — 1/6 applied):
- ¥13,000,000 × 1/6 × 1.4% = ¥30,333/year
Building (new home reduction — 1/2 for first 3 years):
- ¥11,000,000 × 1.4% × 1/2 = ¥77,000/year (years 1–3)
- ¥11,000,000 × 1.4% = ¥154,000/year (from year 4)
Step 3: City Planning Tax (assuming urban area)
Land (reduction to 1/3 of assessed value):
- ¥13,000,000 × 1/3 × 0.3% = ¥13,000/year
Building (no new-home reduction applies to city planning tax):
- ¥11,000,000 × 0.3% = ¥33,000/year
Annual Total
| Period | Fixed Asset Tax | City Planning Tax | Total |
|---|---|---|---|
| Years 1–3 (with new home reduction) | ¥107,333 | ¥46,000 | ~¥153,000/year |
| Year 4 onward | ¥184,333 | ¥46,000 | ~¥230,000/year |
For a ¥40 million home, expect to pay roughly ¥150,000–¥230,000 per year in combined property taxes — significantly less than 1.4% of the purchase price due to assessed value discounts and land reductions.
Tips for Foreign Homeowners
The rules are the same for foreigners as for Japanese nationals. There are no additional taxes or surcharges for non-Japanese property owners.
Practical notes for foreign buyers:
- Tax notices are in Japanese. If you are not fluent in Japanese, having a bilingual real estate agent or tax accountant (税理士) review your annual notice is advisable.
- Non-resident owners: If you live outside Japan, you are required to appoint a tax representative (納税管理人) to receive tax notices on your behalf.
- Selling: Capital gains tax applies when selling property. The rate depends on how long you have owned the property (short-term: 39.63%, long-term over 5 years: 20.315%).
- Inheritance: Japan's inheritance tax (相続税) applies to all property located in Japan, regardless of the nationality of the deceased or heirs. Rates are steep for large estates.
For more on the overall process of buying property as a foreigner, see Can Foreigners Buy Property in Japan? (2026 Complete Guide).
If you are considering financing your purchase, How to Get a Mortgage in Japan as a Foreigner covers eligibility, required documents, and how to compare lenders.
For current mortgage rates, see Japan Mortgage Rates 2026.
If you are still deciding between renting and buying, Buying vs Renting in Japan walks through the financial comparison.
Summary
- Fixed Asset Tax: 1.4% of assessed value (typically 50–70% of market value)
- City Planning Tax: up to 0.3% of assessed value, applies in urban areas
- Residential land enjoys a powerful reduction: assessed value cut to 1/6 (up to 200 m²)
- New homes get a 50% reduction on building tax for 3–5 years
- Real Estate Acquisition Tax and Registration Tax are one-time costs at purchase
- For a ¥40 million home, expect roughly ¥150,000–¥230,000/year in total property taxes
- Foreign owners are subject to exactly the same rules as Japanese nationals