Selling Japanese Property as a Non-Resident in 2026: Withholding and Capital Gains
For an overseas owner selling Japanese real estate, withholding at closing and the seller’s final capital-gains calculation are separate issues.
10.21% may be withheld from the sale consideration
NTA guidance generally requires the payer to withhold 10.21% when consideration for Japanese land or buildings is paid to a non-resident or foreign corporation, subject to a limited exception for qualifying individual residential purchases of JPY100 million or less.
Withholding is not the final tax calculation
The seller’s taxable gain is generally calculated from sale proceeds less acquisition cost, selling expenses and any available special deductions. The amount withheld at closing therefore does not necessarily equal the final tax liability.
Long-term and short-term treatment differs
The classification is based on the holding period as of January 1 of the year of sale. NTA guidance shows a 15% national income-tax rate plus 5% resident tax for long-term gains, and 30% plus 9% respectively for short-term gains, with reconstruction surtax also applying to the national income-tax component.
Non-resident sellers should organize acquisition records, depreciation data for buildings, selling expenses and filing arrangements before closing. This article was reviewed against official NTA guidance on September 2, 2026.