Selling Japanese Property as a Non-Resident: The 10.21% Withholding and Your Tax Return
If you live abroad and sell property in Japan, Japan taxes your gain. The buyer usually withholds 10.21% of the full price and pays it to the tax office (zeimusho). You then generally file a final tax return (kakutei shinkoku). The return compares the withholding with your actual tax, so you may receive a refund or owe more.
Japan taxes your gain even if you live abroad
A gain on property in Japan is taxed in Japan, wherever you live. You generally must file a return, and you calculate the gain in the same way as a person living in Japan.
You are a non-resident for tax purposes if you have no domicile in Japan and have not lived here continuously for one year or more. An employee posted abroad for a year or longer is generally a non-resident. See your tax status in Japan.
When a non-resident sells, the buyer generally must withhold 10.21%. The rate applies to the full price, not to your profit. On a ¥60,000,000 sale, the buyer withholds ¥6,126,000 and you receive ¥53,874,000.
- Question 1: Are you a non-resident? This is usually judged on the day the property is handed over. A residence record (juminhyo) alone does not decide it. If you are not, the buyer does not withhold.
- Question 2: Is the buyer an individual buying a home for themselves or a relative, at ¥100 million or less? If yes to both, the buyer does not withhold.
- In other cases, the buyer generally withholds 10.21%.
The ¥100 million test uses the price each seller receives. A buyer who pays outside Japan and has no address or office in Japan may not withhold. Without withholding, you generally still file if you have a gain.
The 10.21% is a prepayment that your return settles
The 10.21% is a prepayment, not your final tax. Your return compares it with your actual tax. If the withholding is higher, the difference may be refunded after you file. If it is lower, you pay the difference.
Maria lives in Sydney and is a non-resident. She bought an apartment in Japan eight years ago. She sells it to a real estate company for ¥60,000,000.
| Maria's sale | Amount |
|---|---|
| Sale price | ¥60,000,000 |
| Purchase cost, after reducing the building for wear | −¥30,000,000 |
| Selling costs, such as the agent's fee | −¥2,000,000 |
| Gain | ¥28,000,000 |
| Tax: ¥28,000,000 × 15.315% | ¥4,288,200 |
| Withheld: ¥60,000,000 × 10.21% | ¥6,126,000 |
| Possible refund: ¥6,126,000 − ¥4,288,200 | ¥1,837,800 |
This is only an estimate, based on these assumptions: no special deductions and no other Japanese income. The 15.315% rate applies if you owned the property for more than five years on January 1 of the year of sale. Otherwise it is 30.63%. Both include surtax. From 2027 the surtax breakdown changes, but these rates stay the same.
If you cannot show what you paid, your tax can exceed the withholding. In that case you may use 5% of the sale price as your cost. For Maria that is ¥3,000,000, so her gain becomes ¥55,000,000 and her tax ¥8,423,250. She would pay about ¥2.3 million more instead of receiving a refund.
As a guide, if you owned the property for more than five years and use no special deduction, you owe more when your gain exceeds about two-thirds of the price.
Resident tax (juminzei) depends on whether you have an address in Japan on January 1 of the year after the sale. Without an address in Japan on that day, the gain is not subject to resident tax. If Maria sold in 2026 and moved back by January 1, 2027, her resident tax would be 5%, or ¥1,400,000. A residence record left in Japan can also lead to resident tax.
You need a tax agent by the time you file
You must appoint a tax agent (nozei kanrinin) and notify the tax office by the time you file. A tax agent is a person or company in Japan who acts for you. The agent files your return, receives tax office mail, pays tax and receives refunds. Examples include a relative in Japan or a tax accountant.
Choose your agent as soon as you plan the sale. Our tax agent guide explains the notification and where a refund is paid.
You generally file between February 16 and March 15 of the following year. For a 2026 sale, that is February 16 to March 15, 2027. If your return produces a refund, you can generally still file for five years from January 1 of the following year. If you owe tax, or you need a special deduction to reach a refund, treat March 15 as your deadline.
Common mistakes
- Treating the withholding as the end. If Maria does not file, she does not receive her ¥1,837,800. A seller with a loss also needs a return to recover the withholding.
- Showing a Japanese residence record to prove you live in Japan. The Tokyo High Court held that a seller based in the United States was a non-resident, despite a residence record in Japan. The buyer had to pay about ¥76 million of tax on a deal of about ¥762 million. A buyer can generally claim such tax from the seller. Tell the buyer your status before you sign.
- Missing the home deduction deadline. The home deduction of up to ¥30 million has a deadline. You must sell by December 31 of the year of the third anniversary of moving out. If you moved out in April 2023, that date is December 31, 2026.
What you can do yourself, and where you need help
You can check whether withholding applies and collect your sale contract and purchase records yourself. These cases depend on your facts:
- Your status is unclear, for example because your residence record is still in Japan.
- You want to use a special deduction, such as the ¥30 million home deduction.
- You rented out the property or inherited it.
- You must also file in your country of residence.
What changes when a tax accountant handles it
- Once engaged, we compare the withholding with your estimated tax before you sign the contract.
- We confirm your purchase cost from contracts and bank records.
- We check special deduction deadlines against the dates in your documents.
- 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
If the buyer is an individual, is nothing withheld?
Not always. An individual does not withhold only when buying a home for themselves or a relative at ¥100 million or less. An individual buying as an investment, or paying more, generally withholds.
What if I move abroad in the year of the sale?
If you appoint a tax agent and notify the tax office before you leave, the agent can file the following year. If you sold before leaving and have no agent, you generally must file before you depart. For a sale after you leave, you file through an agent the following year.
Can I use the ¥30 million home deduction while living abroad?
Yes, if you meet the conditions. The buyer generally still withholds 10.21%. If the deduction brings your tax to zero and you have no other income, the whole withholding may be refunded after you file. A home where only your family still lives can be treated differently.
Will my country of residence also tax the sale?
That depends on its tax law. Many of Japan's tax treaties let the country where the property is located tax the gain. How double taxation is relieved varies by country. We handle Japanese tax only.
Selling 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 leaflet: tax filing for non-residents on real property transactions (April 1, 2026)
- NTA No.12006: Tax on the income of an individual as a non-resident
- NTA: 2025 Income Tax and Special Income Tax for Reconstruction Guide, pp. 51 and 65
- NTA Tax Answer No.1932 (in Japanese): selling real estate during overseas work
- NTA Tax Answer No.2879 (in Japanese): buying land from a non-resident
- NTA Tax Answer No.1923 (in Japanese): appointing or dismissing a tax agent
- NTA Tax Answer No.1926 (in Japanese): real estate income during overseas work
- NTA Tax Answer No.2012 (in Japanese): judging resident or non-resident status
- NTA Tax Answer No.2030 (in Japanese): refund returns
- NTA Tax Answer No.3102 (in Japanese): filing deadlines for capital gains
- NTA Tax Answer No.3208 and No.3211 (in Japanese): long-term and short-term rates
- NTA Tax Answer No.3258 (in Japanese): when the purchase cost is unknown
- NTA Tax Answer No.3302 and No.3317 (in Japanese): the home exclusion
- NTA Q&A (in Japanese): judging residence for withholding and co-owned land
- NTA leaflet for buyers (in Japanese, September 2025)
- Tokyo High Court, December 1, 2016 (in Japanese)
- Ministry of Internal Affairs and Communications: resident tax for foreign nationals
- Income Tax Act, Articles 2, 161, 164 to 166, 212 and 213; Order for Enforcement, Article 281-3; Act on General Rules for National Taxes, Articles 74 and 117; Act on Special Measures Concerning Taxation, Articles 31, 32 and 35; Local Tax Act, Articles 294 and 318
This article is general information based on rules in force as of November 6, 2026. It is not advice for your situation. If the English and Japanese differ, the Japanese original applies.