Selling Japanese Real Estate as a Non-Resident: Withholding Tax and Practical Points
Last verified: August 31, 2026
A sale of Japanese real estate by a non-resident requires tax planning before settlement. Under National Tax Agency guidance, a person paying consideration for Japanese land or buildings to a non-resident or foreign corporation generally must withhold income tax and special reconstruction income tax at 10.21%.
1. First confirm tax-residence status
Japanese tax law defines a resident by whether the individual has a domicile in Japan or has maintained a residence in Japan continuously for one year or more. Nationality alone does not decide the classification.
2. Withholding at the time of sale
The buyer is generally the withholding agent. The rule can apply to individuals as well as corporations. The amount is generally 10.21% of the consideration paid for the land or building.
3. Important exception
Where an individual buyer acquires the property for the residence of the buyer or a relative and the consideration is JPY 100 million or less, withholding is not required under the stated exception.
4. Payment deadline
For consideration paid in Japan, withheld tax is generally due by the 10th day of the month following payment. Different timing can apply to certain payments made outside Japan.
5. Withholding is not the final tax calculation
The amount withheld from the sale price is a collection mechanism. The seller’s final Japanese tax position depends on the taxable gain and other facts, and a Japanese tax return may be required.
Practical checklist
- Confirm whether the seller is a non-resident for Japanese tax purposes.
- Determine whether the buyer-side withholding exception applies.
- Calculate the settlement amount after withholding.
- Confirm filing, tax representative and document requirements before closing.
This article is general information and not individual tax or legal advice.