Non-Resident Landlords in Japan: 20.42% Rent Withholding and Filing a Tax Return
If you live abroad and rent out property in Japan, Japan taxes the rent. A company tenant withholds 20.42% of the rent, but an individual renting a home does not. Either way, you generally must file a final tax return (kakutei shinkoku) if your income exceeds your deductions. The return settles any withheld tax, so you may receive a refund or owe more.
Your type of tenant decides whether 20.42% is withheld
A tenant who pays rent to a non-resident generally must withhold 20.42%. The exception is an individual who rents the property as a home for themselves or a relative. A non-resident is a person with no domicile in Japan who has not lived here continuously for one year or more. See your tax status in Japan.
| Your tenant | 20.42% withheld? |
|---|---|
| A company, for example for employee housing | Yes |
| A company that rents your property to sublet it | Yes |
| An individual using it as a shop or office | Yes |
| An individual renting it as a home for themselves or a relative | No |
The 20.42% applies to the full rent, before your expenses. It includes surtax. From 2027 the surtax breakdown changes, but the rate stays the same. A tenant with an address or office in Japan must withhold even when paying into your account abroad.
No withholding does not mean no tax
You generally must file when your Japanese income exceeds your deductions, even if nothing was withheld. The National Tax Agency (NTA) also says that receiving the rent abroad does not remove the need to file.
You generally file between February 16 and March 15 of the following year. For 2026 rent, that is February 16 to March 15, 2027.
You file through a tax agent (nozei kanrinin), a person or company in Japan who acts for you. A refund then goes to the agent's account, as our tax agent guide explains.
What counts as income, and what you can deduct
Your rental income is your rent and similar receipts, minus the expenses directly needed to earn them. The calculation is the same as for a resident of Japan.
- Income also includes renewal fees, key money, deposits you do not have to return, and common-area charges you collect.
- Main expenses are property tax, property insurance, repairs and depreciation.
- Interest on a loan to buy the property counts. Repayments of principal do not.
- Other direct costs, such as management fees, can also count. Personal costs do not.
From that income, a full-year non-resident can claim only three deductions: the basic deduction, donations, and casualty losses on assets in Japan. The basic deduction is at most ¥620,000 for 2026 and later. The tax is then 5% to 45%, plus 2.1% surtax.
Example: the same rent with two kinds of tenant
The tax is the same with either tenant, but the cash flow is not. David lives in London all of 2026 and is a non-resident. He rents out an apartment in Osaka for ¥200,000 a month. His yearly expenses are ¥1,000,000, including management fees, property tax, loan interest and depreciation.
| Calculation | Amount |
|---|---|
| Rent for the year | ¥2,400,000 |
| Expenses | −¥1,000,000 |
| Rental income | ¥1,400,000 |
| Basic deduction | −¥620,000 |
| Taxable income | ¥780,000 |
| Income tax at 5% | ¥39,000 |
| Surtax at 2.1% | ¥819 |
| Tax for the year | ¥39,819 |
Company tenant
- Withheld: ¥2,400,000 × 20.42% = ¥490,080
- Possible refund: ¥490,080 − ¥39,819 = ¥450,261
Individual tenant
- Withheld: ¥0
- Tax to pay: ¥39,800
This is only a simplified estimate, based on these assumptions: no other Japanese income and no other deductions. Tax to pay is rounded down to the nearest ¥100.
Common mistakes
- Not filing because nothing was withheld. If you missed past years, act soon. A voluntary late return, filed before the tax office (zeimusho) gives notice of an audit, generally carries a 5% penalty on the tax due. After an audit, the rate starts at 15%. Delinquent tax can also apply.
- Leaving withheld tax unclaimed. Without a return, David's ¥450,261 stays with the tax office. A refund return can generally be filed for five years from January 1 of the following year. Benefits such as the blue return special deduction still need filing by March 15.
- Claiming family or medical deductions. A full-year non-resident cannot claim them.
- Depreciating a former home from its full price. If you lived in the home before renting it out, you first reduce its cost for the years of personal use.
What you can do yourself, and where you need help
You can confirm who your tenant is and collect your records yourself. That means the lease, management statements, property tax notices and loan statements. These points depend on your facts:
- How to depreciate the building, above all if it was once your home
- How to split the purchase price between land and building
- Whether you are really a non-resident
- How your country of residence treats the same rent
What changes when a tax accountant handles it
- We calculate your rental income from your lease and management statements.
- We calculate depreciation, including the special calculation for a former home.
- We check the withheld tax against your rent and settle it on your return.
- We send an English summary before filing and file after you approve it.
We handle Japanese tax for individuals only, by email, with no calls. If you do not have anyone in Japan who can act as your tax agent, we can act for you. The fee is ¥60,000 per year (¥66,000 with consumption tax). See also our tax return service for property owners abroad.
Frequently asked questions
My rental income is small. Do I still need to file?
You generally must file if your Japanese income exceeds your deductions. If it does not, you may have no duty to file. If tax was withheld, a refund return may still recover it.
Does a tax treaty stop Japan from taxing my rent?
Usually not. Many of Japan's tax treaties let the country where the property is located tax the rent, but the treatment can differ by treaty. Your country of residence may also tax it. We handle Japanese tax only.
Can I use the ¥1,040,000 basic deduction for 2026?
Not if you are a non-resident for all of 2026. Your maximum is ¥620,000. The higher amount is for residents. If you lived in Japan for part of 2026, the amount can differ.
Do I pay resident tax on the rent?
Resident tax (juminzei) depends on your address on January 1 of the following year. If you have no address in Japan on that day, your rental income is generally not subject to it. You still pay property tax on the property.
Renting out property in Japan from abroad?
Yuma Komatsu is a Japanese CPA and licensed tax accountant. We prepare, sign and file your return. We work by email in written English. Our tax accountant does not speak English, and we do not offer calls.
Sources
- NTA No.12014: Real estate income of non-residents
- NTA No.12006: Tax on the income of an individual as a non-resident
- NTA leaflet: tax filing for non-residents on real property transactions (April 1, 2026)
- NTA: 2025 Income Tax and Special Income Tax for Reconstruction Guide, p. 51
- NTA Tax Answer No.2880 (in Japanese): paying rent to a non-resident
- NTA Tax Answer No.1926 (in Japanese): real estate income during overseas work
- NTA Tax Answer No.1370 (in Japanese): real estate income
- NTA instructions for the rental income statement, 2025 (in Japanese)
- NTA Tax Answer No.1199 (in Japanese): basic deduction
- NTA Q&A on the 2026 basic deduction changes, Q6-4 (in Japanese, May 2026)
- NTA Tax Answer No.2260 (in Japanese): income tax rates
- NTA Tax Answer No.2024 (in Japanese): if you forget to file
- NTA Tax Answer No.2030 (in Japanese): refund returns
- NTA Tax Answer No.2109 (in Japanese): depreciation when a home becomes a rental
- Ministry of Internal Affairs and Communications: resident tax for foreign nationals
- Income Tax Act, Articles 161, 164 to 166, 212 and 213; Act on General Rules for National Taxes, Articles 74, 117 and 119
This article is general information based on rules in force as of November 6, 2026. It is not advice for your situation.