Taxes When Businesses Sell Real Properties in Japan

Hello, my name is Taisei Koshida, and I am a certified public accountant and tax accountant.

I aim to assist non-Japanese business owners who need help with reading or writing in Japanese. If you find the Japanese tax return system challenging, I can help you with your tax filings.

Many foreign people or companies have been trying to purchase real properties in Japan lately, such as Minpaku, because of the weak yen or for other reasons. So, I will explain how to be taxed when businesses sell real properties in Japan this time.

1. How to Calculate Gain or Loss for Income Taxes

Gain or loss is calculated by subtracting purchasing and sales costs from sales amounts. Regarding buildings, depreciation costs are deducted from purchasing costs, which means gain increases by its amounts.

2. Income Tax Rates

– Individuals

If a real property is held for over five years on January 1st of the selling year, the rate is around 20%, while it is usually around 40%.

– Companies

The profit is taxed by around 30%, including other business profits and losses.

3. Consumption Tax

– Lands

Lands are not taxed because they do not fit the nature of consumption tax.

– Buildings

They are taxed by 10% as long as a seller is taxed business.

I will explain taxes related to property businesses in the following blogs.

Taxes When Running a Property Lending Business in Japan

What Taxes Happen in Purchasing Real Properties in Japan

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